A credit score is a “number” given to consumers and business entities by financial institutions that help them determine your credit worthiness.
The initial credit score for a consumer is 1,200 and the more times a consumer makes an application for any finance, whether it is successful or not, their credit score is reduced. There have been many instances where consumers apply for credit online, and not take the finance, only to find out later that their credit score has been affected by the application or enquiry.
Bill payment is another factor that may affect your credit score. Not only do you need to pay your bills, they need to be paid by the due date. If you are 14 days late with a payment, it will be recorded for 2 years. If you miss a bill payment altogether, after 60 days, that may be recorded as a ‘Default’ on your credit file and will remain on the credit file for 5 years ( if the default is more than $150).
Australians’ Credit Reports, and now Credit Scores used to be something that people do not take seriously. Now that is about to change as your credit report will become your CV (vitae curriculum) that will shape your financial destiny.
Contact Paul today if you need more information about your Credit Score.