Regular credit checks and steps to increase your rating are essential in your financial planning toolkit. Credit reports give lenders a good indication of your creditworthiness.
You can focus on the things that are working and those that aren’t, so you know what to do. This is especially important if your score is currently in the negative. You can get a better understanding of your financial situation by checking your credit score prior to making a large purchase, such as a home, car, or business. Credit checks can be used as often as necessary to ensure your finances are in order.
What’s in a credit history?
In Australia, there are three main credit bureaus: Equifax, Experian, and Ion.
Credit report generally includes:
- Information about the individual (name, date of birth, employer, and address).
- Information on consumer credit liability
- You can use any credit product you currently have.
- History of repayments for each product.
- Infractions and defaults.
- Credit applications and inquiries
- Requests for credit reports (number of requests, frequency, and who else has seen it).
- Credit information for commercial credit.
Get your credit report for free.
Each of the three credit agencies offers a free report every three months. Since there are some differences between each agency, it’s not a bad idea to get notifications from multiple providers.
Contact the credit reporting agency to request a copy of your free credit report:
- Equifax, phone 138 332
- Experian phone number 1300 783 66
- ,000 phone number 1300 734 806
Your credit report: How to read it
You will be asked to create a user account before you can view or download your report. Then, you’ll need to enter your personal information and answer some security questions. You will also be asked for your current and former address and 100 pieces of identification.
After you have verified your identity, a credit agency will review your submission. This can take five days. However, you can usually access your credit report within a few hours. Avoid any service that asks you to pay a fee for the info. And don’t ever give your credit card information.
Get your free credit score.
There is not a ‘universal score that applies to everyone, and there can be differences between agencies.
Experian is Australia’s second-largest credit bureau, closely followed by Equifax. Equifax scores are from 0-1,200, while Experian scores are between 0-1,000.
The scoring systems of both bureaus are slightly different based on the algorithms and methods they use to calculate data. This produces unique results. You may want to compare the scores and see where they differ.
Choose reputable credit score providers.
Credit scores from the three largest bureaus are the most reliable. Other credit score websites offer free reports. But it would be best if you were cautious about what they are offering. These websites are usually linked to the main three reporting models, so it is best to go directly to the source. Reporting bodies outside the three agencies may charge you a fee to prepare your report.
Make sure you do your research on the privacy policies and how your information will be used. These third-party sites charge a fee to monitor your credit score and detect any fraudulent activity. These websites may provide more frequent reports than the bureaus (which typically only issue one notice per quarter).
Credit checks through your bank
All four of the big banks recommend using Equifax, Experian, and Illion. While your bank can provide you with information, it is best to use one or more bureau websites to access your credit report.
Commonwealth Bank offers the only free initiative amongst the four big banks called Credit Savvy. It is designed to assist Australians in understanding, improving, and protecting their credit reputation.
Credit Savvy is a tool that allows you to:
- Your Experian Credit Score
- How to improve your score
- Learn more about the Learning Hub.
- Compare credit products according to your score.
If you are having problems with your score, seek help.
Financial hardship information is not allowed to be included on a credit score. You should contact your lenders if you are having financial problems and worried that this may impact your credit score.
At times, it can be difficult to talk about money problems. We don’t share our frustrations and fears with others, which only adds to the stigma. You can get help with any financial issues that may affect your credit rating. Ask your provider about the options for temporary and permanent modifications.
Developing strong skills in money management can help you navigate difficult times and maintain momentum, even when it takes months or many years to reach your financial goals.
There is no need to suffer silently, particularly when it comes to money issues. Support systems are available to help you improve your relationship with money. Investing in yourself can change your life trajectory.