How do I work out my credit score?


How do I work out my credit score?

Most lenders in Australia use a credit scoring system when deciding whether to approve a loan, so good credit is very important.

Credit scoring systems are a broad filter for lenders, which are used to work out whether a loan should be approved. They also identify potential risks, based on a borrower’s past credit behaviour. 

Many lenders use Veda – the number 1 credit-reporting agency in Australia. Veda provides a score between 1 and 1,200, with 1 being the lowest and 1,200 being the highest (or most reliable).

If you want to work out your credit rating, head to Veda.

What info is held on my credit file?

Your credit file includes a number of personal details, including:

  • Your residential address – current and past addresses, including time spent at each.
  • Employment history – current and past jobs, including time spent at each.
  • Credit applications – made over the past 5 years.
  • Defaults – on payments, as well as bankruptcies and court judgements or writs.

How do I improve my credit rating? 

If you’re worried your credit score may be low, there are ways to improve it. This means understanding what a lender looks for when assessing whether you are a good candidate for a loan.

The following behaviours are likely to improve your credit rating:

  • Staying in one place of residence for a reasonable amount of time.
  • Maintaining stability in your job or field.
  • Not making multiple credit applications for the same purpose.
  • Paying utility bills, loans and credit cards on time.
  • Not applying for short-term cash loans, which are unfortunately more available than ever. (This shows the lender you are finding it hard to pay your current debts.)
  • Limiting the number of credit enquiries you make, especially in the 18-months before you apply for a home loan.

Need help improving your credit rating?

A good mortgage broker will assess where you are at right now, and recommend how you can improve your credit rating, so you look more attractive to potential lenders.

In many cases, there are simply changes you can make, which will help to improve your credit rating and boost your likelihood of securing a loan.

Get started now.

 

Financial Advice Disclaimer: This information is general in nature. Mortgage brokers do not provide financial advice. Clients seeking financial advice will be referred to a qualified financial planner.

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