Credit Scores and what they are?
Did you know that many people don't know what their credit score is or how to get it?
Lets lift the lid on the mystery.
Your credit score is calculated by combining all your financial information. This can include the number of credit enquiries made by lenders, loan repayments, default information and late payments.
A check is conducted when you apply for credit with a financial institution. This could be for a house or a car.
The higher the credit score the btter chance of obtaining credit.
The lower the credit score the less chance of obtaining credit.
So its always a good thing to know what your credit score is and what is on your credit file.
Don't know how to get your credit score or order a copy of your credit file?
http://getcreditscore.com.au/ this link will take you to a website where you can check your credit score and order a copy of your credit file for free.
There are 3 Credit Reporting Companies but many lenders use Equifax which the above klink will take you to.
Check the information on your credit file to make sure it is correct.
Avoid negative entries
Defaults, court judgements and excessive credit applications will all a negative impact on your score, so avoid them.
A default stays on your credit report for five years but even a late payment can stay on your credit report for two years. The more late payments on your credit report, the more your credit score will drop.
Make payments reliably.
Make mortgage, loan and credit card repayments when they are due.
If you fall behind on a repayment, catch up within the "grace period" of 14 days, so you won’t be reported as being in arrears.
Consecutive late payments and paying bills long after they are due to the point where a debt collector is chasing you will impact your score.
Consolidate and lower your limits.
Aim to have just one credit card with a limit lower than your monthly take home pay.
The fewer credit facilities and the smaller their limits, the better your credit score
Knowing what is on your file will assist you to manage your financial situation better and help you to devise a finance plan for the future.
Your Mortgage Broker may advise you on how to register and obtain your credit score.