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What You Need To Know About Credit Scores and Credit Reports

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The Banks & lenders will use your credit score or credit rating to assess your loan application whether they will offer you credit. If you know your credit score or have a copy of your credit report beforehand, you will have a better idea of the suitable deals and be able to further understand why a lender might reject your loan application. 

Your credit score is based on both your personal and financial information that’s available in your credit report. Fortunately, you have the right to access it for free. And should you want to fix certain activities in your report, it is possible. 

If you’ve applied for a loan or credit, there will be a credit report that includes your credit score. We recommend getting a copy at least once a year (you can get it for free every three months). 

Get your online copy within a few days. If you wish to receive it through email or mail, you must wait for extra days. 

If you wish to get your credit score on the spot, you can call the credit reporting agencies for your free credit report. Here are the contact details. 

Equifax  138 332

Experian  1300 783 684

illion  1300 734 806

Take note that different agencies may have different information. You can have a credit report with more than one of the mentioned agencies. Or you can get your credit score for free from an online credit score provider, and this will be same day process. You just need to sign up, agree to their privacy policy, and they will use your personal information for marketing purposes. Opt out after you have signed up. 

Beware of providers asking you to pay money or requiring credit card details. 

How Credit Score is Calculated

Your credit score is based on your credit report and will take into account the amount of money you’ve borrowed, the number of credit applications you’ve submitted, and if you pay your loans, credit card and utility bills on time. 

Credit reporting agencies will give you a score between zero and either 1,000 or 1,200. There’s also a five-point scale that can help your lender determine if you are a risky borrower. According to your score, it can be categorised as excellent, very good, good, average, and below average. 

The higher your score, the lesser risk you are for lenders. This could also mean that you can potentially get more suitable products. If you have a lower score, you can always improve it. 

What’s Inside a Credit Report

  • Name 
  • Date of Birth 
  • Address 
  • Driver’s licence number 
  • Credit product in the last 2-3 years (credit product, credit provider, credit limits, opening and closing dates of the account, joint applicant’s name) 
  • Repayment history in the past 2-3 years 
  • Credit applications 
  • Bankruptcy and debt agreement 
  • Credit report request 
  • Paid Defaults on Utility Bills
  • Unpaid Defaults on Utility Bills 

Remember that a default stays on your credit report for five years (or seven years in the case of a clearout). Even if you pay the debt, the default will stay on your report, but will reflect that you have already paid for it. 

Don’t Forget to Fix Mistakes In Your Credit Report 

When you finally receive your report, make sure that all the debts and loans listed are yours. Ensure all your personal details are correct, especially your name and date of birth. 

Once you see that there is a discrepancy, reach out to the credit reporting agency and ask to amend the details. This is a free service. For more financial advice, feel free to chat with our Excellence Finance team, we’d be more than happy to answer your questions.

 

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