Get a free 30 minute consultation!
1800 00 3328
Menu
Got 10K of Debt? Show me how to be Debt Free

How to Check Your Credit Score for Free

Posted by Debt Rescue on Oct 18, 2019 9:22:40 AM

If you’re like most Australians, you probably don’t think about checking your credit score until you want to apply for extra credit, such as a credit card, personal loan or mortgage. It’s easy to neglect your credit score, especially if you’re afraid of what you might find. However, checking your credit score is a very important part of keeping on top of your finances and making smart money decisions. Especially with the introduction of mandatory Comprehensive Credit Reporting (CCR), it is now imperative you stay on top of your credit score.

Unsure what your credit score is? Here’s everything you need to know about your credit score, how you can check it for free and how mandatory CCR will affect you.

What is a Credit Score?

A credit score, or credit rating, is a number that represents how trustworthy you are to a borrower. Essentially, your credit score (which can range from 0-1,000 or 0-1,200, depending on the chosen credit bureau) sums up the information on your credit report in a single number. The higher your credit score, the more trustworthy you’ll appear to financial institutions when you apply for credit.

Your credit score is extremely important because it directly influences the amount of credit a lender will be happy to lend you as a borrower, including the associated fees and charges involved such as the interest rate. If you have a high credit score, you’re more likely to receive a lower, competitive interest rate than if you have bad credit.

Where Can You Check Your Credit Score for Free?

There are three main credit bureaus that operate in Australia: Equifax, Experian and Illion. You can contact a credit bureau to get a free copy of your credit report and score every 12 months. When applying for credit, lenders will make an enquiry into your credit score to find out if lending you money is worth the risk. Here’s where you can check your credit score for free:

Credit Reporting Bureau Contact Number
Equifax Australia (formerly Veda) 13 83 32
Experian 1300 783 684
Illion (formerly Dun & Bradstreet) 1300 734 806

For a full copy of your credit report, you will need to provide the credit bureau with your:

  • Full name,
  • Date of birth,
  • Current address,
  • Previous address,
  • Day time phone number,
  • Current or previous employer,
  • Driver’s licence, passport, birth certificate or Proof of Age card, and
  • A copy of a document issued by an official body which includes your name and address such as a rates notice, utility bill, or bank statement.

Ordering your own credit report will not impact your credit score. Once you’ve ordered it through one of the above bureaus, it will be sent to you within 10 working days.

When Should You Check Your Credit Report?

1. You Plan to Apply for a Loan

If you’re planning on purchasing a car, house, or applying for a credit card or personal loan, you should check your credit score before you submit the application. Understanding how healthy your credit score is before you get a loan will let you know if a lender will approve your request for credit. Each time a lender makes an enquiry into your credit, your credit score will be lowered. Therefore, if your credit score is unhealthy, you may want to improve your credit score before applying. Factors which may disqualify you from a loan include:

  • Making a late payment,
  • Applying for a lot of credit at once,
  • A bad credit score, or
  • A high debt to credit ratio.

2. You Were Rejected for Credit

If you apply for credit and your application was rejected, you can get a free copy of your credit report and credit score from the credit bureau that the bank or financial institution used to make the enquiry within 60 days of the rejection.

Reviewing your credit report can help you understand why the bank or financial institution rejected your application and allows you to take the necessary steps to improve your credit score or amend it if something was reported in error.

3. To Check for Fraud or Identity Theft

According to the Australian Bureau of Statistics (ABS), 1.6 million Australians experienced personal fraud in the 2014/15 financial year. It only takes a few minutes for someone to hack your account or steal documents that contain personal information. Being a victim of identity theft can ruin your credit score and squash your financial dreams. At the very least, you should order a free copy of your credit score once a year to ensure your credit report remains accurate.

What is Comprehensive Credit Reporting (CCR) and how does it Affect You?

Mandatory Comprehensive Credit Reporting (CCR) came into effect on 1 July 2018 and sees more positive data being included on your credit report to allow lenders a better picture of your finances. This data includes:

  • If you have a mortgage,
  • Mortgage repayment history for the last 2 years,
  • Your credit card limit, and
  • Repayment history for credit cards, car loans and personal loans.

Technically, CCR has been in place since March 2014. It is, however, more important now as the big four banks have finally uploaded all of their mortgage data to the system. This means that 80% of all mortgages in Australia are now reported through CCR.

With the introduction of mandatory CCR, your credit score may change – for better or for worse. For example, if you defaulted on your mortgage 4 years ago but haven’t missed a payment since, it’s likely your credit score will go up because that positive repayment history will now be included, as well as the default. On the other hand, if you have multiple unsecured debts that you are frequently late in paying, your score may go down. Data from Equifax’s CCR State of the Industry Infographic October 2018 shows how CCR data provides a more accurate reflection of a consumer’s creditworthiness, with average credit score increasing across the board when CCR data is included.

Stay on Top of Your Credit Score

It’s now more important than ever to check your credit score for free and make sure the data on your credit report is correct. Under CCR, if you miss a repayment on a debt, you have just 15 days before it goes on your record. So you need to act fast to make sure a default isn’t listed on your credit report that impacts your ability to obtain future finance.

If you’re struggling to make debt repayments, contacting a professional debt management company can help you decrease the impact to your credit score. Get in touch with Debt Rescue today on 1800 560 568 and we’ll assess your situation with a free 30 minute consultation to find the best solution for you moving forward.

Topics: Credit File

Our Debt Experts are standing by – See if You Qualify

Leave a comment:

See if you qualify

Subscribe Here!

Get the Latest Debt Free and Budgeting Advice straight to Inbox Free

Recent Posts

    Our Debt Experts are standing by – See if You Qualify

    Get a free 30 minute consultation!

    Debt resolution and insolvency specialists are available to help.