How To Check Your Credit Rating
01 June 2022
Articles
A credit score rating will assign you to a category that can show a lender if you are a low-risk candidate for a loan. Applicants with a high credit rating may be offered better terms and conditions on their loans, including a better credit rate, reduced fees, and other perks. You may also find that people with a higher-than-average credit score are offered higher sums of money, which is often ideal when you’re looking at buying a home.
Keeping a close watch on your credit rating is the best solution if you’re looking at borrowing money in the future. All reported items in your credit report will stay on your file for at least two years (except for hardship repayment arrangements which stay for one year), with some serious conditions remaining on your report for a minimum of five years. However, some lenders may be willing to overlook defaults and other problems if you’ve been making positive changes to your financial habits.
How does credit score rating work?
Credit bureaus collect and maintain a history of your credit activity as reported by the lenders and creditors you have accounts with – this includes information about current debt, defaults, bankruptcy, credit card accounts, and other financial data. It may also include how often you pay instalments on time or if the payment of any utility bills has required the services of a debt collection agency.
At Equifax, we use proprietary algorithms to assess the data found in the report and then give you a credit score rating. Many factors go into producing your credit report; however, by making sure your current loan payments are made on time and your loan conditions are met, your credit score can improve over time. Most lenders will have a credit score range that they will approve for loans,and the higher your credit rating, the better your chances of having an application approved.
Having an average credit score may limit your chances of obtaining a loan with some banks and other financial institutions, as they are looking for applicants who have a low-risk credit score. In most situations, the higher your credit score rating, the better your chances of being offered a low-interest-rate loan with the lender of your choice. Banks that deal with mortgages and home loans will target and offer loans to applicants with the best credit score.
How to check your credit score rating?
To check ‘my credit rating’, you can order a report from Equifax and examine it thoroughly. If your credit score rating is lower than you would prefer, you can take steps to improve it. While an average credit rating is okay for some loans, you can spend time improving on it and increase your chances of being successful for larger loans (e.g., a mortgage loan).
An instant credit check can be completed through Equifax, and it’ll only take a few minutes. After you’ve entered your details into our online credit checking form, we may request you to upload documents to help identify you and get the correct report. The number of documents required may vary as you’ll need to meet the conditions of a standard 100-point identity check.
A bad credit score may impact your ability to secure the loan you’d prefer. However, there are some specialist lenders who will loan money to people with a below-average credit rating. When you check your credit rating, it’ll show you where you currently stand, and you can consider if you need to follow advice from an expert on how to improve it.
What is a good credit score rating?
A good credit score rating can be classified as any rating that gets you the loan you need. All banks and lenders will have specific guidelines for what makes a suitable applicant. However, they’ll use the information in your credit report to help with this decision. At Equifax, our credit reports use a range from 0 to 1,200, and the higher your number, the better your credit score. In our system, there are five levels (or credit score brackets):
● Below Average (≈0–459)
● Average (≈460–660)
● Good (≈661–734)
● Very Good (≈735–852)
● Excellent (≈853–1,200)
These numbers are a guide and can change depending on certain circumstances. If you’ve been refused a loan, often the lender may not tell you why. If you’ve been denied credit in Australia, you are entitled to receive your credit report (provided it is requested within 90 days). If you find some errors in your Equifax credit report, don’t worry as these can be rectified by sending an enquiry; we will launch an investigation as soon as possible to figure out why these discrepancies happened and make updates where needed. Reporting errors are usually caused by lenders not updating your file or making mistakes (e.g., not notifying the agency of a credit card closure).
There may be times that you may have information about a loan that you did not take out, and it is not an error according to the lender. In these situations, you’ve likely experienced identity theft, and someone has used your details to secure a loan in your name fraudulently. In Australia, ID theft has become quite common. If your credit rating has been damaged due to a stolen identity, then you should report it to the police, and they’ll advise you on what steps to take.
Completing a credit repair to fix a bad credit history or identity theft will take time. However, the sooner you start, the more quickly you’ll have your credit score rating improved. At Equifax, we offer a subscription service that monitors your credit file and will alert you of any changes. We’ll also include dark web monitoring and insurance to cover you in case of identity theft. You can use these as a guide to improving your credit rating.
Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstance before acting on it, and where appropriate, seek professional advice from a finance professional such as an adviser.
