If you’re looking to buy a home then the first step you need to take is to check your credit score. Why? Well, your credit score can be the maker or breaker of home loan approval. This is because lender’s use your credit score as an indicator of your ability to pay your debts and their overall ‘risk’ when approving your home loan.
What Does My Credit Score Say About Me?
Your credit score will provide you and your lender with your credit history. This history contains information about your credit accounts and loans, any bankruptcies or late payments you have made, and any recent credit enquiries. Typically, payments made after 60-days or those still outstanding for bill payments will show-up on your credit history.
Payment defaults and other credit blemishes stay on your credit report for 5 to 7-years and they will affect your credit score or rating. This can make it harder for you to get loan approval or may even mean that you will have to apply for a loan with a specialised lender, as a traditional lender may feel that you are too high a risk for them to give you home loan approval. If you do need to apply for a home loan with a non-traditional lender then it is highly likely that they will charge you a higher interest rate.
Who Has a Credit Score?
Most individuals have a credit score. Basically, if you have a mobile phone account, get sent an electricity bill or any other bill for that matter, then you’ll have a credit score. Your credit score is held by a credit agency in Australia. The most well known Australian agencies are Dun & Bradstreet, Experian and Veda.
How Do I Obtain a Copy of My Credit Score?
Checking your credit score in Australia is FREE as long as you’re prepared to wait for the report. If you want to see your credit score immediately, then expect to pay a fee.
To find out what your credit score is, simply visit any one of the following websites and following their prompts:
It is highly likely that you’ll need to supply the website with your full name, address, date of birth and driver’s license details. Some sites may also ask for your previous address. These details will be used to confirm your identity so that a credit score report can be issued.
How Do I Change My Credit Score?
When you receive your credit report, read through it thoroughly. Make sure all the information is correct. If it’s not, then contact the credit reporting agency who issued that report and ask them to make the changes needed to make your report accurate. To do this, you will need to provide the agency with written proof that an item or items on the report are incorrect.
You can also improve your credit score by doing the following:
Pay-off any outstanding debts.
Make regular payments on your credit cards and any other bills. If you find paying bills difficult, then set-up a weekly payment plan, where you pay for bills in advance when money is available.
Pay your bills on time, every time.
Have long-standing accounts and credit cards that are well managed financially. Adopt good payment habits.
Leave accounts open, even if you no longer use them. Long-standing accounts with no negative payment records can increase your credit score as they show that you are able to manage your money.
If you know someone with an outstanding credit history, ask if you can be listed on their credit card account as a joint card holder. This will improve your credit score as you typically adopt the rating of the main card holder.
Want to know more about your credit score? Don’t wait a minute longer, contact eChoice today and find out how you can improve your score.
Written by eChoice