All you need to know about your credit report

What is my credit score?

How to get my credit score?

How much does it cost to get my credit score?

These are the questions we always ask whenever we think of getting a loan or a credit card. For a good majority of us it’s not a nice feeling trying to find the answers. I always used to get butterflies in my stomach whenever I had to do a credit check. In saying this, your credit score isn’t something you should ignore.

What is a credit score?

The simple answer to this question is: a credit score is a number that will tell any lender how trustworthy you have been with your finances.

Now, just because you have zero credit doesn’t mean that you are going to have a great credit score. You might be in a better financial position compared to someone with debt, but someone who manages their debt with regular payments might have a better credit score than you.

Having no credit history means your lenders have no way of knowing how good you are with your repayments. So, this will be reflected.

How is your credit score calculated?

Credit score is usually calculated based on your credit activities. There are a few different factors that come into the equation when calculating a credit score. For example:

  • How much money you have borrowed
  • How many credit applications you have made
  • How good your debt repayment is

Depending on the credit reporting agency your credit score will vary from zero to 1000 or 1200.

The score is divided into five different categories

  • Excellent
  • Very good
  • Good
  • Average
  • Below average

Why is your credit score important?

The simple answer to this is: credit scores are almost always used to determine your interest rate. What this means is a better credit score will result in better deals with the lenders when it comes to your loans, credit cards, insurances, etc.

Having a good credit score will let your lender know whether you can meet their requirements if your credit request is approved.

Where can you get your credit score?

You can find out your credit score with a free online provider in a matter of minutes.

The following providers can help you with this:

  • Creditsavvy
  • Finder
  • Creditsimple
  • getcreditscore

You definitely shouldn’t have to pay to get your credit score. If there is a provider who wants to charge you for your credit score, always avoid them.

Where can you get a credit report in Australia?

  • Equifax (Formerly Veda)
  • Illion (Formerly Dun & Bradstreet)
  • Experian

These are the main three credit reporting agencies in Australia. You are entitled to get one credit report a year from each of them for free. This can take up to 10 days.

If you want more than one copy or if you would like to receive your credit report sooner, you always have the option of paying a fee to do so.

When should you check your credit report?

  • I always recommend checking your credit report once a year
  • Before applying for a loan or a credit card
  • If you think your personal details have been stolen

What will be included in your credit report?

  • Your personal details
  • Name
  • Gender
  • Last three residential addresses
  • Date of birth
  • Driver’s license number
  • Current employer
  • History of bankruptcy
  • Payment defaults
  • Credit applications you have made in the past 5 years

How can you fix mistakes on your credit report?

When you get your credit report, if you find something is wrong or out of date, the first thing you should do is contact the credit reporting agency directly and ask them to fix the issue. This is usually a free service.

There are a lot of companies out there who will charge you to fix your credit history. All they will do is contact the credit reporting agency and request to update any incorrect information. This is something you can do yourself and save hundreds of dollars.

How long does this information stay on your credit report?

This usually depends on the type of the data:

  • Your personal identification information will be held in your credit report for the life of the report.
  • Your repayment history information will stay on your credit report for 2 years.
  • Any credit enquiries made in the past, overdue accounts listed as a payment default, overdue accounts listed as clear-outs, court judgments, and writs and summons will stay on your credit report for 5 years
  • Overdue accounts listed as serious credit infringement will stay in your account for 7 years
  • The time frame may vary regarding bankruptcy and consumer credit accounts.

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