Comprehensive credit reporting
I’m hearing from a lot of clients and friends that they don’t understand how their credit score is created and some of the changes that have gone on in the reporting. As of September last year comprehensive credit reporting was mandatory for some of the lenders and as of September this year all loans, credit cards and personal loans will need to be displayed on your credit file.
What this means is that you will have a rating or a score at the top of your credit file that will determine how some lenders will assess your loans or any credit applications. Some of the online lenders will even give you different interest rates based on your credit score.
This score is made up of the information your credit report:
• how old is your credit file
• how many hits have you had on your credit file applying for finance
• have you got any directorships or business relationships
• how long have you been in your employment & how long have you been in your home
• have you got any defaults or judgements against you
Now with comprehensive credit reporting all of your open credit accounts will be listed displaying the last 24 months of repayment history. For many buyers on the Northern Rivers they have had issues in the past, that will now reflect on their reports. This could be when you’re renting a home in Ballina with friends and forgot to pay the last electricity bill or it could even be when you’ve gone and parked in Byron Bay and you’ve got a parking fine that left unpaid. Multiple things will now show on your credit score. You need to watch out and protect this like gold as this will determine how easily you can get a loan in the future and potentially what interest rate you are able to get.
You should only apply for finance that you intend to use. Do not just see if they will give you a loan, or a credit card to as this will reflect on your credit file.
If you are ever late on a bill try get that cleared as soon as possible, if you ever have disputes over bills quite often is better to pay that bill first and then dispute it because if you get a default it’s listed there for five years.
I have seen many first home owners in Lennox head who were looking at constructing their new homes in the epic estate recently finding issues on the credit file that they did not know about. Most of these issues were either to do with electricity bills or their phone bills so you need to watch out and make sure you always pay your bills on time
if you would like to find out more please give us a call are always happy to help
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