So your'e thinking about purchasing your first home! Your Credit Score plays an important part in the Home Loan approval process... and in your everyday life...so stay one step ahead and check it out...for free!
What is a credit Score?
A credit score is a number between 0 and 1,000 that indicates how credit-worthy you are, and how likely you are to pay your bills on time. Most credit scores are between 300 and 850.
The higher the score, the better your credit rating is.
A good score is more than 500, so if your score is high, you should be able to get better offers from banks, insurance companies and utility companies. If your score is low, you should find out what’s affecting it (for example, unpaid bills) and work to fix it - You have a legal right to access to your free credit report - its not instant so allow some time
How Can I check my score? There are three credit reporting companies operating in New Zealand so if you want to check your record or correct any information about you, you need to contact them all:
The following credit reporters operate in New Zealand:
Why is my score low?
You can end up with a low score for many reasons, such as if you fail to pay your bills, if you apply for credit too often or within a short period of time, if you don't pay your bills, even if your partner defaults on a debt that also has your name on it.
How Can I maintain a good score?
Pay your bills on time
Call your credit provider(s) in a timely manner and alert them if there is a problem meeting your commitments
Review your credit file to make sure there are no errors in the information and/or discover any overdue accounts that have been forgotten about
Monitor your credit file to ensure someone is not fraudulently using your identity (a growing problem worldwide)A "no" to a credit application, or the supply of goods and services where payment is deferred, does not necessarily mean your credit file is flawed.
Credit providers each have their own lending criteria, so seek an explanation
Remember that the details on overdue accounts or collections, even when paid, remain on your file for five years from the date of default, as part of your credit history
An overdue account is usually an account where payment has been overdue for a minimum of 30 days.
Not sure how to get your report or understand what it means...talk to your Mortgage Adviser for a free consultation