Whether we like it or not, our credit histories have an impact on our lives.
They help lenders to decide whether or not it is a smart choice to allow us a line of credit.
This means that they influence whether we get a loan for a house or a car, or even a mobile phone plan. But many Australians don’t know much about credit histories at all. They aren’t familiar with how they’re calculated, or what can change their credit scores. And they definitely don’t know how to check them, even though they have such an impact on our financial opportunities.
Well, this article is here to change that.
We’re going to be laying out all the facts for you, including explaining just what your credit history and credit scores are, how you can check it, and what it might cost you.
First, What Is a Credit History and Credit Score?
Credit history (or credit report) is essentially a record of all of your responsible repayments and is linked to a credit score, which is a ranking that summarises all of the information on your credit report and is used to assess your credit applications. This information is available to banks, credit card companies, collection agencies, and even the government. Your credit score is calculated with a mathematical algorithm. It is then used to determine whether you’re going to make payments in the future and if you should get the line of credit you apply for.
Now, the first thing to remember is that not everyone will have a credit file. You’re likely to have a credit record (in some form) if you’ve ever applied (or been granted) a credit card, a personal or business loan, a mortgage, a mobile phone or internet plan, any interest-free store loan, a store card, or a utility account. Your credit file may also contain a record of any overdue debts and payments, bankruptcy, any credit limits on your accounts, and how many credit enquiries you’ve made over the past five years.
Who Looks At Your Credit Report?
A number of businesses who lend money or approve loans are able to access your credit file. If you go into the bank to apply for a loan or a line of credit, your bank will likely inform you that they’ll be checking your credit file and use that information to make their decision. This data is Australia-wide and can be seen by banks, credit card companies, mobile service providers, utility providers, and in some cases landlords.
Do I Have Access To My Credit Report?
Absolutely! In Australia anyone is entitled to one free credit report check per year. Not only are you able to get your credit report for free (after a 10-day wait in most cases), but you should be checking it on a regular basis. The reason for this is that there might be mistakes or issues on the report that are negatively affecting your chances of getting a loan. You also need to check that your personal details are correct. When you look at your credit report make sure that no debts have been listed twice, and no mistakes have been made on repayments that might have been made a little late. When you check your credit history, you are able to make sure that you’re free from identity theft.
How Can I Check My Credit Report?
In Australia there are a few different companies that you can use to check your credit history and your credit score. You’ll find that, if you’re willing to wait about 10 days, a credit report check is free. If you want a faster delivery on your credit report, you may need to pay for it. You’ll also need to pay if you’ve requested more than one credit report that year, unless you’re in a certain situation.
There are three main bodies for credit reporting in Australia, known as credit reporting bodies (CRB).
Veda is able to provide both credit reports and credit scores for free with a $10/day wait or around $80 for instant delivery. Veda use their own VedaScore system to calculate your credit score between 1 to 1200 and this number is seen by lenders as they assess your applications.
Dun & Bradstreet provide a number of services to customers, through D&B Check Your Credit, including credit alerts for when your credit report changes (for $60/year), ID alerts for when your ID details change (for $30/year), ID reports to help you verify your personal information is correct and, of course, credit reports to check your credit (for $30 fast track or free for standard service).
Experian takes the credit check one step further. Partnering with CreditSavvy they provide a full service for people looking to keep on top of their credit. The service is totally free, and offers a range of useful tools to help people maintain and improve their credit over time.