Credit for good behaviour can score a better deal
MANY of us have no idea what a credit score is, let alone what it actually means.
But that magic number between zero and 1200 can ultimately determine whether or not you are creditworthy.
By finding out your score, you can be on your way to a better deal on financial products.
The national average VedaScore is 760. However, about 85 per cent of Australians have no idea what their credit score is and most are reluctant to ask for a better deal on a credit card or personal loan.
Credit reporting agencies keep detailed reports on a customers’ credit history. These hold information such as applications for credit, whether repayments have been on time, overdue or defaulted, court writs and judgments, and bankruptcy information.
By punching out a few of your personal details into getcreditscore. com. au, you get vital information on how you fare financially – and that could ultimately save you money.
Peer- to- peer lender Society One’s chief executive officer Matt Symons says finding out your credit score can help “empower people” and get them well on their way to scoring better financial deals.
“Armed with the knowledge that if you have a great credit history, you should absolutely be using that to your advantage and there’s a number of ways you can do that,” he says.
“You can shop around and look for a provider that’s going to offer you risk- based pricing, or you can go back to your existing provider and tell them you’ve got a very good credit profile and why aren’t you getting a better rate.”
Until last year, information on an individual’s financial history could be shared by lenders but was restricted to credit applications and defaults.
But legislative changes now allow additional information, including “positive” or “comprehensive” information.
This is data such as whether a customer has a good credit history – for example, if they can meet their monthly repayments. It doesn’t just focus on the bad stuff. Getcreditscore. com. au spokesman Christopher Zinn says it’s important consumers know their credit score and make sure it’s a healthy number – if not, they need to change their financial ways.
If they are a good borrowers, they should tell their lender their score and try to get a better rate, he says.
“There are various credit providers who will give you a better rate if you have a better credit score,’’ Zinn says.