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23 July 2021
Reading time: 4 minutes
Posted
by
Esther Goh
and Tom Hartmann
, 115 Comments
Your credit rating – whether you realise it or not – matters!
Most adults have a credit history, even if they’ve never taken on any debt. A credit report covers off your history of bill payments and use of credit, as well as any defaults or court judgements. And businesses, employers, and landlords may do a credit check on you when deciding whether to offer you credit, a job or a tenancy.
Read on to find out more about this mysterious credit file and how to get your hands on your own credit report.
First things first – you’re probably wondering, 'How do I check my credit report?'
There are three credit reporting bureaus, and you are entitled to get a free copy of your credit report from each of them. (If you need to check your credit urgently, you can pay a fee to get it processed faster.)
It’s easy to check your credit online. Here are the links to request your credit history from each agency and the expected timeframe to receive your free credit report.
Once you receive your credit file, look it over carefully and if there are any errors, ask for them to be fixed. Identity fraud is on the rise and if you see inquiries, accounts or defaults on your credit report that you didn’t know about, you may have been the subject of identity theft.
Your credit report contains your personal details (name, address, birthdate etc), details of any credit inquiries, as well as any recorded negative or positive data.
When a third party checks your credit it will show up as an inquiry on your credit record, so think twice before letting anyone run a credit check on you - too many of these on a credit file can look bad to lenders.
Negative information includes details such as court judgements or payment defaults. A default is a missed payment that has been overdue for more than 30 days where the lender has tried to recover the money owed. Even when paid in full, a default can stay on your credit report for five years!
Positive information can include details of your regular repayments – eg, mortgage, credit card, hire purchase or loans. Your credit report may show what types of credit you currently have, the credit limit, and the name of the lender.
The move to positive credit reporting means that keeping up-to-date with payments can count for something!
Your credit score relates to your credit history. Essentially, your credit score is a number between 0 and 1000 that estimates your ability to keep up with bills. Scores are not part of your free credit report – they’re typically only included if you pay for a full credit report.
What’s a ‘good’ credit score? Well, the higher the score, the better – it means you’re seen as low risk by lenders. Between 500–600 is the norm, and scores in the 700+ range would be considered above average. Keep in mind that this number isn’t fixed and your credit rating can change over time. Also, your score can vary between different credit agencies.
A number of factors can affect your credit score. These might include how often you’ve moved house and how short your credit history is, along with the things mentioned in the previous section that show up on your credit report – payment history, defaults, number of credit inquiries, etc. The algorithms aren’t transparent to the public.
Lenders typically do a credit check when you apply for credit – that might be opening a new account with a bank, finance company, or even a phone or power provider. If you’ve got a clean repayment history there won’t be any issues there, but a bad credit rating can make it hard to get approved for finance or result in a lender charging you a higher interest rate.
A potential landlord or insurer may also want to check your credit history. Some employers also run credit checks on job applicants!
So while you may not give much thought to your credit rating from day to day, it does pay to keep your record clean. Making payments on time is the best way to do that.
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Comments (115)
Comments
11 October 23
kelly
Absolutely great information and resources for everyone from a trusted source. Thank you
16 July 23
Not pro or against alcohol or other addictions, but what ruins lives is the excess, alcohol, work, gambling etc..
Hope you find balance!
15 July 23
Peter
After providing all the data, Equifax won't allow you to proceed with the non-payment option.
5 July 23
Please change the photo of woman with her face in a glass of wine
Alcohol is addictive and ruins families and lives
4 July 23
Elizabeth
I'm not sure
22 June 23
Bruce
The Equifax link for the free credit check asks for a payment (of $0) then goes to error page.
The link for illion asks for too much information.
Need to be able to do this simply and whilst I understand the need for security with theft of details prevalent surely a credit check should be simple.
20 June 23
Tom from Sorted
Kia ora tātou, especially to all those affected by the Latitude/Gem privacy breach, which like you we are very concerned about. To protect your credit history and avoid identity theft, ask all the credit agencies listed above – Centrix, Equifax and illion – to freeze (suppress) your credit report and place a fraud alert on it. Kia kaha
14 June 23
Graeme
Those requesting credit reports in comments......
Read instructions above.
Leaving a comment will not get you one.
14 June 23
Nola
I also received a letter from GEM by Latitude saying my personal records had been hacked and stolen by a cyber incident. I am not happy about this so want to know what information you have of mine and my credit you have urgently. @Laureen copied your message as I am in the same boat.
13 June 23
Cherilee
Can I please have a credit check
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