Credit Reporting Updates – Effective Sept 2019.

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When are credit reporting changes taking effect?

Credit reporting updates are coming into effect this September.

In the last few years banks and other credit providers have taken some time to implement the new comprehensive credit reporting changes.

What are recent credit reporting changes already on my credit file?

Commonly seen changes already in effect show open lines of credit cards on consumers Equifax Veda credit files. This information shows the last two years of payment history, type of card and limit.

What will be the new credit reporting changes on my Equifax credit report?

Come September the banks will have to show mortgage payment information on your Equifax Veda credit file as part of credit reporting updates coming into effect. NAB have already implemented this addition to credit reports.

It is therefore important that your payment history is up to date on mortgages and credit cards.

How does this affect my Veda credit history?

Although late payments are not listed as defaults, they do appear as being late and that can lower your credit score thus reducing chances of future finance or good interest rates.

Can I see what is on my Equifax credit file?

Not sure what is on your credit history? Apply online and obtain your credit report together with an assessment identifying any potential issues.

Further reading on comprehensive credit reporting changes can be viewed here by going to this credit smart article.

What is my credit score?

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How is my credit score used ?

In Australia your credit score is used by lenders and credit providers as part of their overall process in determining if you are considered an acceptable risk. Remember that it is only part of the process.

Naturally the higher your credit score, the lower risk you are considered.

But having a high credit score alone is not the only determining factor when a lender decides to approve or decline your finance application.

How is my credit score calculated?

Credit reporting bureaus in Australia compose your credit report based on many different pieces of information. Their data bases gather all of the information you have submitted in loan applications over the past, as well as from certain public data bases.

Try to think of the data base giving you a tick for good aspects and a cross for bad aspects. At the end of the overall calculation the data base gives you a score based on the number of credits or ticks you have accrued.

What is good for my credit score?

So a credit reporting bureau such as Equifax or Experian give you credits for good aspects which go towards a good credit score. Here are some good aspects of a credit file which would contribute towards a higher credit score.

  1. stability and long term in both residential address and employment history. This shows you are somewhat stable in character, to a computer algorithm anyway.
  2. Age. The older you are to a degree, the more stable your character is considered. The same goes with being single or having a partner, single people pose more risk.
  3. Gender. And example would be young males are considered higher risk than older females.
  4. Loan or credit applications with major and reputable lenders. These applications are considered acceptable on your credit history.
  5. Limited number of applications for finance or credit. Not too many applications shows that you are not desperate or carefree when is comes to needing finance or credit.

What is bad for my credit score?

  1. Not paying your bills on time. This can lead to payments defaults being listed or even court judgments, both of which severely impact your credit score.
  2. Too many applications for finance. This makes you appear desperate for finance and also worries lenders why you have been decline elsewhere before going to them.
  3. Type of applications. Applications for “fast money” type loans of “payday loans” are considered to be somewhat desperate and subsequently lower your credit score. Even credit cards applications are not good apart from one every few years.

How do I improve my credit score?

There are several ways you can improve your credit score.

  1. Firstly tidy up any inconsistent information on your credit file such as incorrect address data, incorrect spelling of your name and any other inconsistent data which may be conflicting with what you would normally place on a finance application. Your credit file must match what you fill out on an application.
  2. Secondly address any type of defaults or court actions. You can dispute these with the credit provider or you can hire a professional credit repair solicitor. Some entries are removable under certain circumstances and it is definitely worth investigating as opposed to doing nothing.
  3. Thirdly make sure you do not apply for any more fast money or payday loans. This impact your score highly. Overnight improvement does not happen in this area and will take a year or two.

How do I protect my credit score?

Make sure you are vigilant with the sharing of your personal details.

Avoid online applications where you enter your personal details in less than reputable websites.

Never give your financial details to anyone except on applications or debit requests.

Request a copy of your credit file regularly and check it out! Access your current credit score by clicking here.

What is a perfect credit score?

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Such a common question, what is a perfect credit score.

This seems to be one of the most common questions when clients seeking finance start to make inquiries.

The answer is simple. There is no such thing as a perfect credit score in Australia. Perfect meaning 1200 out of 1200 with Veda Equifax.

A more accurate statement would be some clients have better credit scores than others.

Veda Equifax credit scores.

Veda Equifax have a complex system in Australia which gathers all data supplied and creates a score for lenders to view when reviewing your credit file and finance application.

The score is based between zero and 1200. Reality is that very, very few people exceed 1000. Industry rule of thumb seems to point at a reasonable to good score being above the 700 mark.

The score alone is not used by any lenders as the sole source for approving or declining finance. In fact it is only one of many criteria used when lenders make a decision.

Good credit score and still declined !

And yes you can have a good credit score but still be declined for finance.

Lenders are now placing much more emphasis on reviewing in detail your income, assets and liabilities and capacity to service a loan.

A credit file with defaults or judgments will affect your score greatly.

Additionally a credit file with a lower score and no defaults is better than a credit file with a high score and default data present.

Don’t focus on what is a perfect credit score alone. Ensure you have no default data and especially ensure that your finance application information matches what is on your credit file. Consistency is key.

More info on credit scores

Read this article by news.com.au “credit score news article” for other aspects relating to a perfect credit score.

Need to find out what your Veda credit score is? go to our online access page for same day service in returning your complete credit file assessment and Veda score.

Don’t neglect your credit report!

Don’t neglect your credit report!

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 Not checking your credit report can have dire consequences. Never neglect your credit report.

Your credit report is one of the most vital aspects to successfully obtaining finance or credit.

Common sense tells us we should make sure our credit history is in tact prior to submitting a finance application, right?

However we tend to think it will all be okay and just go ahead and submit an application in the excitement of the moment.

Applying for finance can make us think differently. Our emotions change.

This can lead to you to an unintentional decision where you neglect your credit report.

It is critical that your credit report is intact before you submit any finance applications.

If you don’t it could literally cost you thousands of dollars in interest with a mortgage where you are forced to accept finance from a second tier lender.

Never neglect your credit report. Gather the courage to check first and be prepared. Better that you find out if any adverse entries exist rather than have a lender tell you when they decline your finance request.

Especially people who are certain that they have a good credit report get the biggest surprises. Mistakes can be made on your credit report, meaning its not your fault and the entry could be incorrect. But a lender will make you go away and clear that up first.

There are many articles with classic examples of this on the internet.

Don’t neglect your credit report by sticking your head in the sand. This could lead to ultimate disappointment. Check your file sooner rather than later.