Your credit score if like an extreme close-up financial selfie, without a filter. It’s a warts-and-all snapshot of your money self. Much like removing a wart, you should periodically review and remove any blemishes on your credit report.
Where can you get your credit report and score?
In Australia there are three different, private organisations which hold a credit report on you, and you need to check them all.
The problem is that beyond these three main organisations, there will be many other companies trying to offering insight into your credit file.
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Maybe they want to target you for future financial product sales.
Or maybe these businesses want to hard-sell you pricey debt consolidation systems or extortionate payday loans.
The tricky thing is spotting the safe from the cynical, which is why it’s best to get your report straight from the source.
The 3 ratings agencies that are legit, and free
The good news is that, as of July last year, every Australian is entitled to a free credit report from one of these agencies, every three months.
Previously, it was only every 12 months.
The other important change is that this report now also includes your actual credit score.
This number is everything to you.
It determines whether you will be approved for everything from a loan to a mobile phone.
It’s an American-style, ‘positive’ reporting system that we’ve had for quite a number of years now.
But the correct word may not be ‘positive’… the point being it depicts a depth of information that includes whether you have closed accounts and also if you have been late to repay any credit facility.
The information may, in fact, look negative.
Irrespective, the data all feed into your credit score in three different mysterious formulas that generate three scores, on three different scales.
Yes, it’s strange.
In any case, the particular credit agency now has to tell you, under the new rules, what your score actually means - i.e. whether it is good or bad.
This score essentially sums up your credit worthiness and appeal to a new provider.
So, ideally, you want it to be above average.
How to apply for your free credit report and score
The three credit reporting agencies are:
It is best to click straight through to these organisations themselves through the direct links above. Google them instead and you’ll be served paid ads which use the agencies’ names in their search terms.
And as mentioned earlier, it can be hard to tell the expert from the exploitative.
What if you don’t like what you find on your report?
Far from needing to pay a company to do it for you, you are perfectly capable of repairing your credit score yourself.
The first step is to check for any errors on your report.
Then, you first, ask the provider to correct them.
If that fails, you can then register a dispute with the relevant credit agency.
The further good news is that improving your score is absolutely possible… over time.
Don’t miss repayments, unless you have first asked for financial hardship leniency.
‘Hardship’ won’t now drive down your score - that’s another new welcome change.
But the fact you are getting hardship concessions will be listed on your report, for a year.
If it’s just life admin that has seen you miss bills, set those calendar reminders.
You have only 14 days’ leeway to be late on a credit repayment of any kind. And the transgression sticks around for two years.
With any other bills, it is 90 days. But the black mark will stay on your file, and hurt your score, for five whole years.
My other top tip for a fast score fix is: Be careful of your credit applications.
Get declined, and you will see your score significantly dip.
But even if you apply for credit quite often – say, several times a year – your score will be suppressed.
Simply think through your money moves to keep your credit score squeaky clean.