GOLDEN RULES

Central Leader - - OUT & ABOUT -

I ama uni­corn.

That’s a sen­tence I never thought I would be­gin a money col­umn with.

Uni­corn is a term used in the credit scor­ing in­dus­try for peo­ple with credit scores over 900.

They are so rare they are prac­ti­cally myth­i­cal. At least that is what I had been told.

But overnight I be­came one, mak­ing me won­der whether credit uni­corns re­ally are that rare, or whether there has been some­thing deeply flawed about the credit rat­ing sys­tem.

Ev­ery adult has a credit score be­tween zero and 1000, with zero be­ing un­speak­ably ter­ri­ble, and 1000 rep­re­sent­ing a god of money.

They are calculated by the big credit re­port­ing bu­reaus, in­clud­ing Veda and Dun & Brad­street.

They com­pile re­ports us­ing in­for­ma­tion passed to them by our banks, our in­sur­ers and a whole heap of other busi­nesses.

Banks, fi­nance com­pa­nies, util­ity com­pa­nies and land­lords Check your credit score

Check for er­rors on your credit file Check how you com­pare to neigh­bours

check peo­ple’s credit scores de­cid­ing whether to make them a loan, get a mo­bile phone con­tract, or rent a house.

Un­less you live in a cave with­out a phone, elec­tric­ity, or plumb­ing, you have a credit file, and a credit score.

If you don’t know what your score is, check it for free with Cred­itSim­ple.co.nz, an on­line ser­vice run by Dun & Brad­street.

When Credit Sim­ple launched last year it was a water­shed mo­ment.

Most peo­ple in this coun­try don’t know their credit scores, which is a re­sult of how hard it used to be to get your credit re­port and score. Un­less you paid, the bu­reaus made you wait ages.

The day Credit Sim­ple launched, I checked my score. It was mid-700s, which was dis­ap­point­ingly av­er­age.

Then, last week, I got an email from Credit Sim­ple sug­gest­ing I check again as ASB and West­pac had started pro­vid­ing ‘‘pos­i­tive’’ in­for­ma­tion to it.

Credit re­port­ing used to be all neg­a­tive. Fail to pay a credit card bill on time, and the fact ap­peared as a dark stain on your credit re­port.

By con­trast, pos­i­tive re­port­ing in­volves banks and other com­pa­nies telling the credit bu­reaus when you make pay­ments on time.

Ap­par­ently, adding pos­i­tive in­for­ma­tion to my credit re­port caused my score to jump by a stag­ger­ing 200 points.

I didn’t feel pride, even though Credit Sim­ple tells you how you rank against the other res­i­dents of your street, and I was num­ber one in my grat­i­fy­ingly long road. I felt anger.

Credit scores are sup­posed to show how credit-wor­thy a per­son is. They mat­ter. They can be the dif­fer­ence be­tween get­ting a home loan, or not, or get­ting the nod from a let­ting agency, or be­ing told to take a hike. It turns out the old sys­tem was scor­ing me in­ac­cu­rately.

The same will be true of oth­ers, and still will be for many, as ANZ and BNZ haven’t yet em­braced pos­i­tive credit re­port­ing like Ki­wibank, ASB and ANZ.

Some of ANZ and BNZ’s cus­tomers will be undis­cov­ered uni­corns like me. Per­haps uni­corns aren’t such rare beasts as we thought.

GETTY IMAGES

Uni­corns re­ally do ex­ist in the credit in­dus­try.

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