Diana Clement: How to Know Your Credit Score
4 minutes to read
Finding your credit score is easy and inexpensive. Photo / 123RF
Can’t rent a property? Getting a mortgage? Borrow at reasonable rates? Your credit score may be the problem.
If you forgot one or three invoices in the past, or if you made late payments,
your credit score could be low. You might just have to eat a humble pie and pay off some of those debts of the past.
Cleaning up your credit score can help you get ahead. Lenders, utility companies, landlords, and even potential employers review your credit score. If this shows that your debt and account payment history is poor, they might reject your application.
You might not even know what’s holding you back. For example, if it is a rental that you are looking to secure, your credit will likely be checked by the owner or property manager. If your credit score is low, they’ll usually move on to the next person they think is more likely to pay rent on time.
I was asked for this article when I read a post from a landlord who, to his surprise, asked a former tenant to come forward to settle a Rental Court debt. The tenant had reformed, saved a deposit for the house, but was unable to get a mortgage due to bad credit behavior in the past.
You can find out your credit score by requesting your credit file / report from the three New Zealand credit bureaus: Illion, Equifax and Centrix. You have to do all three.
It’s free, fast, and gets easier every time I ask for my credit reports. It took me less than five minutes to do all three this week, and all I needed was my driver’s license and a web browser.
Centrix was the easiest, and I got my report by email two hours later. Illion asked me to create an online account, but once I did, he provided my report instantly. Equifax was the trickiest and tried to charge me $ 9.95 for a three day delay instead of the 10 days free of charge. No thanks. The others provided it for free the same day. There’s no way it should be three days let alone 10.
Regular checking of your records may reveal forgotten debts or, for that matter, credits taken out in your name by crooks, fraudsters, or (sometimes) former partners if you haven’t completely separated your finances. I once had a store card in my name opened by an unknown person who had stolen one of my bank statements. It can happen and you better know it.
Centrix CEO Keith McLaughlin says people regularly turn to his agency to get their credit history in order.
“What I would recommend is that if you’re considering a rental or a loan or a mortgage, you get a copy of your credit report before you start the process,” says McLaughlin. “Take a look at it and make sure it’s correct. “
If you can settle unpaid debts, your score will improve immediately or over time if you are willing to make a repayment agreement with the creditor.
Incorrect entries are rare but can be fixed if you go to the party that loaded the default.
Also look at your current behavior, says McLaughlin. If you are ever more than 10 days behind on utilities, loans, and other payments, it will show up on your credit report. To prevent this from happening, put all those bills on direct debit and make sure you manage your money so that there are funds in your account payable. Timely payments will soon help resurrect your credit score.
Finally, beware of sharing utility bills with roommates and / or partners if the relationship is not going to be long term. If you move out and forget about your debts, your credit score could be damaged and you may have to pay the entire bill yourself to restore your credit.