Why you need to find out your credit score

MANY Australians remain clueless about their personal credit score or what information is collated by lenders to keep a watchful eye on them.

Some of the nation’s largest financial institutions, including National Australia Bank, HSBC and Citi, have all started collecting customers’ positive credit information.

This includes how many open credit accounts they have and how much debt they are in – all of which is being added to their dossier of financial data. But alarming data from credit reporting agency Experian found 65 per cent of Australians have never checked their credit score and are not aware of any changes as to what is being collected.

Positive credit reporting came into force on July 1 and requires licensed credit providers to have at least

50 per cent of positive consumer credit data ready for reporting.

The remaining three big banks are likely to start collecting positive credit information on their customers by the end of this month.

Experian’s spokesman, Poli Konstantinidis, said the latest changes would impact all credit scores.

“Under the new changes we will see the open date, the close date, the credit limit, credit type and 24 months of repayment history,” he said. “It will help facilitate more responsible lending and it should allow a lower cost of credit.”

The move to share positive credit information among lenders helps them make more informed decisions before deciding whether to approve a customer submitting a credit application.

The types of credit that will come under lenders’ microscopes include credit cards, personal loans, home loans and automotive finances, as well as bankruptcies and defaults.

The nation’s biggest credit reporting agencies include Experian, Illion and Equifax. Scores given by the agencies vary but usually they range up to 1000 or 1200 – the higher the better.

A spokeswoman for the Australian Retail Credit Association, Geri Cremin, urges all Australians to “take control” of their credit file by checking what is on there and knowing their own score. “The single most important thing you can do is stay on top of your repayments and make sure they are on time every month,” she said. “You essentially get a tick every month when you pay on time.”

Research from Creditsmart showed only 20 per cent of Australian women were aware of what a credit score was, compared to 25 per cent of Australian men.

To find out where you can access your own personal credit file, visit creditsmart.org.au