credit check

What you need to know about your credit score

Here's what you need to know about checking your credit score in light of changes to Australia’s credit reporting system.

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Do you know what your credit score is at the moment? If you don’t then you’re not alone because research suggests that more women than men are in the dark about their credit health.

Following recent changes to Australia’s credit reporting system, it’s worthwhile being alert to how your credit score stacks up.

Basically, financial institutions have access to greater “positive” and “negative” consumer data – such as repayment history – rather than just the latter under the previous regime.

It means access to and pricing in relation to products such as credit cards, home or personal loans may be impacted, and some borrowers may be able to access better deals.

The impact of the reforms are particularly concerning when you consider that a quarter of Australian women are completely unaware of what a credit score is and 65 per cent of women have never checked their credit report, according to research from consumer education website, CreditSmart.

The research, performed by YouGov Galaxy, shows that men are overall 10 per cent more likely to check their credit report compared to women.

Finding out your credit score by doing a simple, free credit check can help you to know a little more about where you stand and how much you may be eligible to borrow from a lender.

So how do free credit checks work?

It’s really quick and easy to carry out a credit check- and it won’t cost you a penny. In Australia, there are a number of online providers who can give you your credit score. Experian and Equifax are the main ones you’ll come across in Australia.

Check out one of these websites if you want a free credit rating:

Each website will clearly instruct you on how to find out your credit rating and you’ll just need to be prepared to enter in a few key personal details.

Are free credit checks reliable?

It’s really useful to double or even triple check with one or more credit score providers when getting a free credit check. This will reassure you that you’re getting the most reliable credit rating applicable to you at the current time.

You need to be aware that free credit checks aren’t always reliable and up to date as your credit score is dynamic.

This means that it can change in line with your financial circumstances so if you default on a loan one month, it could dramatically decrease – whereas you may pay back a loan in full in which case your credit score could increase.

It could take a little while for your credit check to update and show the results accordingly.

What to do if you find errors in your free credit check:

This is really important as errors on your credit file could mean that you have a bad credit score unnecessarily.

If you find that there are errors or inaccuracies on your credit file, you should report them immediately and request that they are changed.

This is something that should be honoured and that you will then benefit from as your credit score is then likely to increase.

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