Chasing good credit
YOU’VE been a responsible borrower your entire life, never missed a bill or made a late repayment, but your credit score still only ranks you slightly above average.
What the heck is wrong with you, you might wonder?
The good news is there’s nothing wrong, because perfect credit scores are almost impossible to achieve. And better news is that responsible borrowers are now starting to see a spike higher in their scores as big banks become involved in Australia’s new comprehensive credit reporting regimen.
Your credit score is used by lenders when considering loan applications, and some offer lower interest rates to people with high scores.
They are compiled by credit agencies such as Experian, Equifax and Illion.
And free reports can be obtained directly or through websites, including creditsavvy.com.au, getcreditscore.com.au and creditsimple.com.au.
A perfect credit score is 1000 or 1200 points, depending on the agency, and lender MoneyPlace’s CEO Stuart Stoyan said fewer than 1 per cent of consumers have a perfect score.
A score rated “excellent” – in the top 20 per cent of all scores – could still deliver borrowers the best interest rates.
ANZ this month started sharing comprehensive credit data, which has moved millions of people’s credit scores. NAB was already doing it and the two months but you begin paying on time again, your score will recover over the next 12 months, but would take an immediate hit of potentially hundreds of points.”
Recent research by Experian found that two-thirds of Australians have never checked their score.
The majority of consumers also don’t know that more of their personal financial data is now being shared.