Checking your credit score and report should be considered a ‘must do’ prior to applying for any type of credit. From large credit applications such as a mortgage or a MacCredit loan, down to mobile phone contracts and utility bill accounts, your credit file will be checked to assess whether you can be relied upon to make timely payments.
When you check your credit file, you will:
By doing this, you will put yourself in a great position for ensuring you are approved for credit in the future, whenever you need it and whatever the reason for needing it.
Australia’s credit bureaus like Equifax and Dun & Bradstreet are options you have for checking your credit file.
Numerous factors affect your credit file. Here is a rundown of both the widely known and lesser known factors, and some tips for ensuring your credit file always paints a positive picture of you from a credit perspective.
Making Late Payments
The most basic obligation you have when opening any credit account is to make your repayments on time. Although creditors can only place a notice of late payment on your credit file if a payment is 14 or more days late, do not allow this to lull you into taking a carefree approach to making repayments.
Defaults and Other Infringements
If you do make late payments and these are logged on your credit file, if you do not take action to get your account up to date you may default on your agreement. If you then still fail to repay the money you owe, further financial sanctions could follow. Depending on the extent to which the situation escalates, you may find yourself subject to a court judgment or even bankruptcy proceedings.
All of these outcomes, if they occur, will be logged on your credit file and make it very difficult for you to acquire credit in the future.
How do you avoid this?
By making all your payments on time, and by being upfront and honest with your creditors if you ever reach a point where you are starting to struggle to meet your debt repayment obligations.
Information and sanctions around late and missing payments are factors that most people know can influence their credit file.
What are the factors that are lesser known but that could be helping you unintentionally damage your credit score?
Your credit file contains information on all the credit enquiries you have made in the last five years. If you have made a significant number of enquiries within a short space of time – for example more than three in the last six months – this can reduce your credit score.
Repeated credit enquiries are interpreted as a desperation for credit, and may be a sign that you are a credit risk. Although it is tempting to apply for credit with a different lender if you are declined – different lenders have different criteria, after all, so you might have a better chance of being accepted elsewhere – you should check your credit file, ensure it is correct, and only apply again once you’re more sure of being accepted.
Payday loans can cause havoc with your credit file. Despite what payday loan providers say about building your credit history by using them, any benefit of repaying a payday loan on time is massively outweighed by the damage done by using them. A payday loan is a sure sign of short term financial need and potentially an inability to manage your finances. While you might be able to apply for further payday loans without any problems, when it comes to acquiring other types of credit you may struggle to be accepted.
Banks and finance providers that offer mortgages and other types of credit may even refuse an application on the grounds of you having used payday loans within a specific recent period. If you are having short term financial difficulties, look at other solutions before turning to payday loans, as they could have a dramatic effect on your ability to acquire credit in the longer term.
Make it a regular and on-going financial habit to check your credit file and ensure all the information held is up to date and correct. Be aware of these factors and how they can affect your ability to acquire credit, and you’ll find you are usually able to access credit whenever you need to in the future.
Disclaimer: This article contains general comments and recommendations only. This article has been prepared without taking account of your objectives, financial situation or needs. Before taking any action you should consider the appropriateness of the comments made in the article, having regard to your objectives, financial situation and needs. If this article relates to the acquisition, or possible acquisition, of a particular credit product you should obtain and consider the relevant disclosure documents before applying for the product.
Your credit history can be a hugely influential part of your life. It will be checked on numerous occasions throughout our lives, and not just when we apply for a mortgage, a new credit card, or want to take out a mobile phone contract. Your credit history holds a large volume of information about your financial behavior, and helps paint a picture to lenders as to whether you are creditworthy.
Your credit history, and your credit score, can not only decide whether you are accepted for credit or not, but can also dictate how much credit you are able to access and whether you are able to access the best interest rates and other offers available.
When you check your credit history, you will access all the information that particular credit bureau holds against your name.
What benefits can you expect to earn when you check your credit history?
Now you know what you will find, and how you can benefit, when you check your credit history, it is time to look at how you can do it.
By law, you are able to request to see your credit report from a credit bureau free if:
You can request access to your credit report from Australia’s three national credit bureaus:
You can also access your credit report free from Get Credit Score, which is powered by and uses data from Equifax.
While all three of Australia’s national credit bureaus legally have to allow you to access your credit file under the conditions noted earlier, both Equifax and Dun & Bradstreet offer premium services that include identity protection, credit alerts, and access to advice and tips for improving your credit standing.
We have shared some further information on what each offers, including costs, below.
Equifax is Australia’s leading credit bureau, and is the one used here at MacCredit when assessing medical loan applications. Equifax’s premium credit checking and account services range from $79.95 – $119.95 per year. The more expensive options provide more frequent updates to your credit score and report, as well as insuring you against the risk of being a victim of identity fraud up to $15,000.
View Equifax’s packages here.
Dun & Bradstreet have operated in Australia since 1887, and today offer a range of personal credit services, with credit reports and accounts from a $15 one-off fee up to a $60 a year subscription for anyone looking for advanced protection and credit alerts.
View Dun & Bradsteet’s packages here.
Take the time to check your credit history now and ensure that all the information held against your name is correct. Even if you are not planning to apply for credit in the near future, it is worth ensuring all the information held is accurate, as this could save you significant time and effort should you ever need to acquire credit.
Credit Reports, How To, Uncategorized
If you are considering undergoing a medical procedure or need to pay for upcoming medical treatment, a personal loan is a great solution that may help you cover some or all of the cost.
In general, different types of personal loans may have different features or interest rates depending on the lender and the purpose of your loan. With MacCredit, our medical loans are only available to individuals who can provide evidence of an upcoming procedure or treatment, such as a quote from a clinic.
Variables that may apply to personal loans include:
With MacCredit, you can borrow up to $70,000 to cover the cost of your medical or cosmetic treatment.
Check Your Credit Report First
You should check your credit score and that your credit report is accurate before applying for a personal loan, or indeed for any type of credit or finance. Doing this will enable you to get an idea of how MacCredit or any other lender views you and is likely to assess an application for credit.
What are you looking to achieve by checking your credit report first?
Checking your credit report before making an application is crucial. All credit enquiries made over the last five years are logged on your credit file. A large number of credit enquiries being made over a short period of time can be a sign of financial mismanagement or desperation for credit, can reduce your credit score and discourage lenders from accepting an application. If you check your credit score first, you need only apply for credit when you know you will be accepted.
With your credit report checked and verified as being accurate, and you’re happy that you’re going to be accepted when you make an application, you can start researching loan providers that meet your needs. A useful starting point is to consider the type of loan you are looking for or whether you have a particular reason for needing a loan. For example, if you need a loan to cover the cost of a medical procedure, we’re specialists at providing these here at MacCredit, but if you need a loan to buy a car, you will need to look elsewhere.
When researching lenders, if they have eligibility criteria listed on their website, ensure you qualify to apply in respect of these. Applying without checking you’re eligible can easily lead to you getting a credit enquiry on your file unnecessarily.
Use any tools on lenders websites, including their blogs and resources, loan calculators, and anything else made available to help you make an educated decision about your personal loan.
If you still have questions, pick up the phone. If you’re considering a medical loan from MacCredit you can call us on 1300 884 355 to ask any questions or begin your application.
Once you have checked your credit file and have researched and identified a suitable lender, it is time to apply for your loan. If you are declined even when you thought your credit score would be good enough, we would discourage you from doing so again until your score has improved. While different lenders will have different benchmarks and credit scores at which they will accept you, remember that repeat applications can negatively affect your credit score, so consider whether it is worth taking a chance that another lender will accept you.
If you’re considering a medical loan from MacCredit, call us today on 1300 884 355 to ask any questions or to begin your application.
Credit Reports, How To
If you ever see a loan advertised as interest free, it is understandable that you would find such deals attractive. While these loans might seem attractive at face value, and generate a lot of interest and enquirers from customers, is there really such a thing as an interest free loan?
While an interest free loan might well be interest free in terms of interest applied to the overall loan balance, you’re going to pay for the loan somehow. Loans that are advertised as ‘interest free’ will usually have a ‘merchant fee’ applied, which you repay along with your loan balance each month. In such cases, the interest rate equivalent will have been built into the so-called merchant fee, meaning the finance element itself is not actually free.
In comparison, loans that aren’t ‘interest free’ may still have different fees and charges that are applied, however these will be built into the actual comparison rate you are given when you apply for and accept the loan.
Another potential problem with ‘interest free’ loans is that they can be inflexible regarding making additional payments or repaying the loan off in full earlier than the loan schedule. This is a common source of additional fees with such loans, and can quickly mean you would have been better off accepting a regular loan, even if the interest rate seemed unattractive at first.
Let’s now take a loan advertised as interest free and a loan advertised with an interest rate and show you how to compare the two as you try to make a decision.
Some loan providers might provide a lower merchant fee upfront but then lock you into additional charges throughout the loan term, thus increasing their earnings from your account.
The main thing to remember with this example is that, in most cases, loans such as that shown in loan A will include all administration fees and charges within the actual comparison rate. The only additional charges you are likely to incur with such loans is if you have to pay an extra fee should you want to make an extra payment or repay the loan in full. However, those charges will still apply in the example of loan B.
To get a further idea of how companies offering loans such as B above are charging you, speak with lenders you are considering applying for a loan with and asking about their fees and charges schedule. They will then explain how these are absorbed into the actual comparison rate but also provide a specific breakdown of what you’re paying for.
As well as loans, credit cards, store purchases, and other types of credit are often advertised and packaged as being interest free.
In these cases, interest free usually only applies for a specific promotional period. After the promotional period has ended, interest will be applied, and the rate will often be much higher to compensate for the 0% rate earlier. Some credit cards and store cards even offer deals where you don’t have to pay anything for a specific period of time, alongside a 0% interest deal. For example, you could open a new credit card that is advertised as 0% interest for six months, as well as pay nothing for six months. If you aren’t switched on when it comes to managing your finances, you might look at this and think you can save a fortune by not repaying anything over six months. However, after six months the high interest rate is suddenly going to kick in, and you’ll have missed the opportunity to clear your balance before this happens.
As with personal loans that are ‘interest free,’ such products will usually also have an additional schedule of high charges and fees, and be very inflexible, as a counterbalance for no interest being applied.
Ensure You Aren’t Caught Out
We understand how easy it is to be taken in by attractive looking offers such as ‘interest free,’ be it on a loan, a credit card, or any other type of finance or credit product. However, by looking closer at what is being offered, you will usually identify that the ‘interest free’ deal could end up costing you a lot more than if you just chose a product that applies a regular interest rate. The only exception would be if you use a 0% credit card and ensure the balance is cleared before the end of the promotional period, however you would need to make sure you are set up to manage your finances well to ensure you don’t get caught out with these.
If you are considering a MacCredit personal medical loan and want to know how much of your interest rate is made up of administrative fees and charges, call us now on 1300 884 355.
Credit Reports, Payment Options
Having a good credit rating and a strong credit history is considered to be an important element of life. A good credit rating and a credit history that paints you as a trustworthy and reliable borrower can help you access credit whenever you need it, whether you are looking to take out a new mobile phone contract or be accepted for a mortgage.
Given the importance of a good credit rating and the flexibility and choices having one can bring to your life, what are the best ways to maintain and increase your credit rating?
As alluded to above, your credit rating will be checked whenever you want to open a new account or take out a finance product. This includes what are known as “non-finance” products such as mobile phone contracts and utility bill accounts.
Your credit rating not only decides whether you will be accepted or not, but also goes some way to dictating the terms of your credit agreement. For example, let’s look at a scenario if two people were to apply for a personal medical loan from MacCredit:
Once all circumstances have been considered, it is possible that both person A and B could be accepted for a loan. Yet, due to person A clearly appearing to be a lower credit risk, it is likely that they will be able to:
These benefits mean that, depending on their reason for needing a loan from MacCredit in the first place, they have far more flexibility when deciding how to proceed.
There is no one way nor is there a certain formula that will ensure you always maintain a high credit rating or improve a low one. There are, however, a number of factors that are widely known to be considered by credit referencing bureaus. This means that here at MacCredit we are able to provide you with some practical ideas, some of which could become valuable financial habits, to improve your credit rating now, and maintain it into the future.
Here are the ideas and tips you need to know.
Accessing your credit report gives you the opportunity to discover all the information credit bureaus hold on your financial history.
You can access your credit report free if:
By checking your credit report first, the knowledge and ideas you will learn about improving your credit rating will quickly become relevant, make more sense, and be more inspiring to put into place.
You can access your credit report via any of Australia’s major credit reporting bureaus using the links below:
Another option is to use Get Credit Score, which uses information from Equifax.
Please note that, although Experian completed an acquisition of Equifax in February 2016, as of April 2016 these reporting agencies continue to hold separate information and data (i.e. depending on the information held by each your credit rating may appear differently).
MacCredit uses Equifax when assessing our customer credit applications.
Once you have chosen a credit bureau and have been able to access your credit report, it is time to begin taking action.
What should you be looking for?
These are quick checks that will help you identify if your credit score is being held down by incorrect information. Conducting these will help you identify any creditors that have not been updating your credit file as they should have been, as well as if any fraudulent accounts have been opened at an old address, for example, or if anyone has attempted to open accounts using your details.
Raising Queries About Information Held on Your Credit Report
If you identify any of the errors or concerned noted in the paragraph above, you should take action right away.
The first thing you should do is query what you believe to be any incorrect entries with the creditor listed on the report. If you have or have had an account with the creditor in question, you will usually be able to resolve queries at this stage.
If, having spoken to a creditor you haven’t dealt with but appear to have had an account opened or an application for credit made with them, you have identified you might be a victim of identity fraud, you may need to contact your local police department, SCAMwatch, or IDcare to report the fraud and attain a reference number before a creditor will update your credit file.
Creditors know better than anyone the importance of credit files containing correct information, so they will usually be more than sympathetic and willing to work with you to correct any information that is inaccurate or out of date. However, creditors may also be wary of individuals looking to fraudulently remove data from their credit file, for example if they are trying to make genuine debts ‘disappear.’
If, in the unlikely event that creditors are unable or unwilling to be cooperative even if you have provided a crime reporting reference and any additional evidence, you can ask the credit bureau to update the information for you. This can take time as they will often look to verify information with the creditor in question, even if you have been able to provide a detailed outline of the actions you have taken to date.
If you have been a victim of identity fraud, consider taking out ID protection from the credit bureau you used to check your credit file. The credit bureau will then alert you in future any time a credit enquiry is made in your name.
That covers everything you need to know when it comes to checking your credit report is accurate. What are the additional steps you can now take to ensure you improve or maintain your credit rating?
Having a large number of credit enquiries lodged on your credit report can damage your credit score. Repeated enquiries are perceived as a sign of desperation for credit and an inability to manage finances in the short term, rather than as a genuine need for credit such as to make a high value purchase. As such, repeat enquiries will lower your credit score and see you perceived as a higher credit risk. You can manage this in future by:
Having credit cards with combined limits of $10,000 feels great when you have that kind of spending power and potential sitting in your pocket. If you never use your credit cards, then you’re not actually demonstrating you’re a reliable borrower and might even be damaging your credit rating. A future application may be declined on the basis that you haven’t demonstrated an ability to manage and repay a credit card balance, or because you already have access to a high value of credit therefore shouldn’t need any more.
You can avoid having credit that you don’t use by:
The biggest sign of a reliable borrower is that they have met all their credit and debt obligations by making all their repayments to creditors on time.
What circumstances might see you miss a repayment deadline?
These are all genuine circumstances and some of them have probably happened to you or someone you know. While creditors can only put a note on your credit file if you are 14 or more days late with a repayment, they still have notes on their own records, which may affect your ability to acquire further credit from them in the future.
If you do make a payment 14 or more days late, despite your account being ‘up to date,’ once it is logged on your credit report your credit rating will be damaged. As you would expect, the higher the number of late payments you have, the bigger the influence on your credit rating.
You should also be aware that different creditors might take a different approach to how they view your late payments when they manually review your credit report. For example, a mortgage lender, or ourselves here at MacCredit if you are looking at borrowing a large sum to pay for medical treatment, may take a stricter view of late payments than a mobile phone or utilities provider would.
Being able to set up a direct debit means you are always able to keep up to date with your repayment obligations. If you pay more often, not only could you be saving money by ensuring you pay less interest, particularly with credit cards, but in the context of your credit rating you are:
Although you cannot set the parameters and benchmarks of how a lender will perceive you or decide whether they will accept your credit application, you are able to control everything they see when they access your credit report. Do this by first checking your credit report on a regular basis to ensure accuracy, and then by following the steps above, while being financially prudent and responsible, to ensure that your circumstances are closer to person A than to person B in the example we explored at the start of this article.
Australia’s leading credit bureau, Equifax, is one option you have for checking your credit file.
As noted above, Equifax is Australia’s leading credit reporting company, used by many businesses, including ourselves here at MacCredit, for the purposes of:
Employers may also use Equifax to credit check prospective employees as part of the referencing process, or prior to offering them a job, while for consumers it is a vital resource that may help improve the likelihood of being accepted for credit.
Numerous factors affect your Equifax credit file. Here is a rundown of both the widely known and lesser known factors, and some tips for ensuring your credit file always paints a positive picture of you from a credit perspective.
Debt consolidation is a popular and widely used financial solution. What is debt consolidation, what are the potential benefits of debt consolidation, and what are the different types of debt consolidation you may wish to consider?
Debt consolidation is a type of debt refinancing. When you consolidate your debts, you use a new loan to pay off all your current debts, thus consolidating your debts into one payment.
If you use debt consolidation as a financial solution for you, what are the benefits you may enjoy?
Debt consolidation is a great tool and solution for moving towards becoming debt free. However, if you use debt consolidation because you are insolvent, you may subsequently struggle to repay the consolidation loan. Also, if you continue to open new credit accounts after consolidating debts, and fail to keep up with the repayments on your consolidation solution as well as the new accounts, you could face serious sanctions including your accounts falling into default, and being subject to court proceedings or potentially even becoming bankrupt.
Here are some of the different types of debt consolidation that you may be considering, as well as a brief overview of whether they are likely to be beneficial to your situation.
Debt Consolidation Loans
A personal loan for debt consolidation is probably the most traditional and common method of consolidating debts. Many lenders offer specific debt consolidation loans, and will pay the loan out to your creditors rather than to yourself. This saves you the hassle of contacting all your creditors yourself, but also allows your new lender to protect you by ensuring the loan is used for its intended purposes.
When shopping around for a debt consolidation loan you need to make sure that the terms of your loan mean you’re definitely better off. Debt consolidation loans don’t automatically mean a better interest rate and lower repayments. If you don’t plan correctly you could easily find yourself having consolidated debts but now repaying more or at a higher interest rate, meaning it’ll take you longer to become debt free.
Balance transfers are commonly used to consolidate credit card debts, but depending on the type of new credit card you have you might be able to transfer loan balances and other credit accounts onto them.
Balance transfers with credit cards are a useful debt consolidation option if:
Under these circumstances, you would be able to repay a large chunk of your debts without accruing any further interest. Depending on how much debt you then have left outstanding, you could look to consolidate again onto another card with a promotional rate. It is crucial that you commit to repaying your debts if you opt for a balance transfer, as repeated balance transfers without actually reducing your debt in the long term can cause damage to your credit score.
Short Term Debt Solutions
Using short term debt solutions, such as payday loans, is definitely a debt consolidation option depending on your level of debt and the amount you can borrow, but it is definitely not one we would recommend. Even if you are able to access a short term debt solution that allows you to repay over 6-12 months, the interest rate is likely to be so high that you’ll ultimately pay much more than if you just repaid your creditors at your current rate.
If you are starting to struggle with debts, it is far better to be open and honest with your creditors than it is to turn to short term debt. Creditors will usually be understanding and willing to help you if you apply for hardship consideration. If you use short term debt and begin to miss payments, your debts could quickly spiral even further out of control.
When it comes to debt consolidation, consider which option is best for you under your circumstances, and in the case of balance transfers think about whether you’re able to make the necessary repayments to reduce your debt during any promotional period.
If you opt for debt consolidation, ensure that you’re set up to enjoy what should be the benefits of doing so, and not using it as a mask for deeper financial troubles or as a means of clearing up credit to use once again.
Australian law states you can request to see your credit report from a credit reporting bureau free if:
If you ask to see your credit report under the circumstances listed above, then yes, they are completely free. Outside of the above circumstances, you may be able to find services that allow you to access your credit report free. While you won’t pay anything for these services, you may need to consider additional factors, such as the reasons behind something being free.
In some cases, including with Equifax and Dun & Bradstreet, Australia’s two leading credit referencing bureaus, the credit bureau offers a free service as well as premium credit checking services. Equifax, with Get Credit Score, and Dun & Bradstreet, with Check My File, do this under different trading names. They may generate a significant income from advertising on their websites. They could have partnership deals in place with other businesses. Depending on the credit bureau you use for your free credit check, you might find that you can access additional services or features. Check whether these are also free, otherwise you could incur charges without realizing.
While you will need to provide some personal details when requesting a free credit check in order for the credit bureau to verify your identity, you will have control over how that information is used later. As with completing any submission form or application, you will be asked if you are happy to be contacted by carefully selected partners and other third parties. Ensure you choose the preferences you wish so you aren’t targeted with emails and leaflets advertising products you have no interest in.
When you ask to see your credit report you will be doing so with Equifax, Dun & Bradstreet, or Experian, or with companies operated by these credit referencing bureaus. In terms of your information being safe, you have nothing to worry about. If anything, by taking the opportunity to check your credit report and potentially identifying where you have been a victim of identity fraud, you are making yourself safer. What you should consider is if you allow your personal information to be passed onto the carefully selected partners as mentioned earlier, you might not know where your personal details are going after that.
You are legally entitled to see your full credit report under the circumstances highlighted at the beginning of the article. Your free credit check is not a partial report, nor are certain snippets of information withheld from you. When you see your credit report free, you are seeing the full reality of the information held by that specific credit bureau against your name at that time. While you do have the opportunity to use premium services from the credit bureaus if you are interested in additional features and benefits, the detail you see on your free credit check is full and accurate.
Not checking your credit report is dangerous. You could be falling victim to identity fraud without realizing it, and could have thousands of dollars worth of debt against your name that have nothing to do with you. If you do not request to see your credit report following a declined application or because you have requested information be corrected, you should take advantage of your entitlement to view your credit report once every 12 months.