WHAT IS A CERDIT SCORE?
A credit score, also known as a credit rating, is a numerical representation of the risk you pose to lenders when borrowing money. When you apply for a car loan, for example, the lender will assess your specific credit score to gauge how likely you are to repay the amount borrowed. Lenders take your credit history into account to decide whether to approve your application, how much money to lend you, and the terms of that loan. A ‘good credit score’ suggests that lenders consider you a reliable candidate who is likely to repay the loan promptly and in full. Conversely, a ‘bad’ or low credit score may indicate previous difficulties in paying off loans or bills as agreed. As a result, lenders might be reluctant to extend credit to individuals with a troubled repayment history, as they cannot be sure if the borrower will fulfill their obligations. Your credit score is derived from the information contained in your credit report. It typically ranges from 0 to 1000, reflecting the probability that you’ll repay your debts on time. A higher score indicates a lower risk for lenders, making you more attractive for loans. In Australia, the average credit score is 734, which is considered ‘great’ and can help you secure car financing at favourable rates. In Australia, your credit score is evaluated by three primary credit bureaus: illion, Equifax, and Experian. Each of these agencies collects distinct types of data about consumers, resulting in variations in the credit scores they provide. Each bureau employs a unique methodology for calculating credit ratings, meaning your scores could vary slightly between the three agencies. Purcell Financing take great care of improving your credit rating while assisting you with approval for a loan that suits your needs. Personalized advice can be provided to repair, maintain and improve your credit file.
KEY POINTS THAT MAY EFFECT YOUR CREDIT SCORE:
- Bill & debt paying history
- Current unpaid debt
- The number of debt facilities you have open
- The type of debt facilities you have open / use
- How much of the available credit you’re using
- Enquiries / applications / Requests for any type of credit
- Bad debt – such as debt sent to debt collectors
- Bankruptcy; Part 9 debt arrangements & Court Judgements
- Missing payments on any direct debit or bills
- Applying for utility bills
- Length of credit file
- Your age
- The postcode you live in
CREDIT SCORE GENERAL RANGE EXAMPLE:
- 300-579: Poor
- 580-669: Fair
- 670-739: Good
- 740-799: Very good
- 800-850: Excellent
- 850-1250 Excellent
INCORRECT INFORMATION ON YOUR CREDIT FILE?
1. Errors by Credit Reporting Agencies:
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- Inaccuracies in personal information (name, date of birth, address).
- Duplicate listings of a debt.
- Incorrect debt amounts.
- Action: Contact the credit reporting agency to request corrections.
2. Errors by Credit Providers:
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- Incorrect reporting of overdue payments.
- Failure to notify about unpaid debts.
- Misreporting of defaults during disputes.
- Ignoring agreed-upon payment plans or altered contract terms.
- Action: Contact the credit provider to remove incorrect listings.
3. Dispute Resolution:
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- If disputes cannot be resolved, you can contact the Australian Financial Complaints Authority (AFCA) for independent assistance.
4. Limitations:
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- Accurate information cannot be changed or removed from your credit report.
- Positive and negative records are retained for a specified period.
If you have any questions or need further guidance on dealing with credit report errors, feel free to ask! We may be able to assist with guidance in fixing the errors or provide contact details of a trusted credit repair agent who can seamlessly arrange to have these things repaired for you.