clear score Archives - Credit Simple

How do I get a clear score for credit applications in Australia?

Credit Simple — Sun, 02 Sep 2018 19:36:59 +0000

Have you ever forgotten to pay a mobile phone bill? Perhaps one of your credit card payments was a little late? These may seem like minor issues, but they can leave a lasting black mark on your credit history that may affect your access to lending.

Working your way towards a better credit rating can improve your financial situation, but what helps you get a clear score for credit in Australia? What does a ‘clear score’ even mean?

Credit defaults stay on your report for five years, so you’ll want to make sure no mistakes have been made.

Understanding your credit score

Your illion score via Credit Simple will range from zero to 1,000. You’d be forgiven for thinking a clear score means zero, but this is the worst credit rating you can have. If you are at the lower end of the scale, you may get rejected for loans or face much higher interest rates.

When we talk about a clear score, we mean a credit rating that is free of red flags and other problems that could scare off lenders. You may not be able to achieve a perfect rating of 1,000 overnight, but there are options to clear your score from troublesome blemishes.

Find out if you have a clear score

Checking your credit score is simple and free. This will give you a good idea of how you appear to lenders, but you’ll need access to your credit report if you want further details on your financial history.

Payment defaults, bankruptcies and court judgments will all prevent you from getting a clear score. Applying for credit on multiple occasions within a short space of time can also harm your rating.

Rectify mistakes

Credit defaults stay on your report for five years, so you’ll want to make sure no mistakes have been made. Defaults are any payments of $150 or more that are at least 60 days overdue and the borrower has been notified in writing that they owe money.

Late payments may have been recorded due to a system failure or human error at the company’s end. Maybe your identity was stolen? If you identify an error, you should contact the credit provider immediately to try and rectify the situation.

You may need to contact a credit provider to help you achieve a clear score.

Pay off debts and build your score

Obtaining a clear score may take some time, but you can build good credit karma by working down debts and avoiding late payments in the future.

Australia has a Comprehensive Credit Reporting system, which means both positive and negative credit behaviours are included on your report. You can therefore begin showing lenders that your credit rating is on the road to recovery, even when a clear score is some way off in the future.

Why not sign up to Credit Simple to keep track of your credit score?

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Credit score FAQ: What are the benefits of a clear score?

Credit Simple — Sun, 26 Aug 2018 20:00:31 +0000

Your credit score is a bit like a heart rate for your finances. It offers lenders a quick and simple way to gauge your overall financial health. One of the key differences is that a credit score can never be too high!

A clear score doesn’t necessarily represent a perfect credit rating (which will generally range from 0 to either 1,000 or 1,200 in Australia depending on the credit bureau calculating it.) But chances are a clear score means you don’t have any significant black marks – such as defaulted payments or bankruptcies – on your record.

A clear score enables you to shop around for better deals at different lenders.

So what are the benefits of a clear score? And do you need a clear score for a mortgage and other forms of lending? We’re here to give you the low-down.

Benefit #1: You are more likely to get accepted for credit

Lenders view unblemished credit files far more favourably, which means you’re more likely to receive approvals for loans, credit cards and other forms of borrowing if you have a clear score. However, a blank history isn’t the same as a clear one. You still need credit activity on your file for providers to get an idea of how reliable you are at paying back debts.

You are more likely to receive approvals for mortgages and other lending with a clear score.

Benefit #2: Better interest rates on borrowing

You aren’t just more likely to receive approval for credit with a clear score; you’ll also generally have better access to lower interest rates. People with shaky credit histories are usually charged higher interest because they are riskier for the lender, which makes the overall cost of borrowing more expensive.

Benefit #3: A wider choice of lenders

A clear score enables you to shop around for better deals at different lenders. A low credit rating means less choice, and you may be forced to accept much higher interest rates and unfavourable terms and conditions. For example, you don’t need a clear score for a mortgage in Australia, but you’ll likely require a much higher deposit or have to use a specialist ‘bad credit’ lender if your rating is poor.

A clear score could help you get better deals on credit cards and other lending.

Benefit #4: More negotiating power

Another key benefit of having a clear score is the ability to negotiate with lenders for better deals on credit. You can therefore be more active with your money management and borrowing. Tell lenders about any attractive offers you’ve received elsewhere and ask if they’re willing to beat them. This can be especially lucrative for larger loans where lower interest rates can result in sizeable savings.

Still wondering why you should get a clear score in Australia? Just click here to find out your credit score and learn more about what you can do to improve your creditworthiness.

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Want a clear score? Knowledge is power. Make sure you know your credit terminology

Credit Simple — Sun, 01 Jul 2018 19:48:33 +0000

Credit card usage has become ubiquitous worldwide, even among those who want to get a clear score. In Australia alone, we have accrued around $32 billion in credit card debt to date. Statistics also show that from 2010 to 2017, the average credit card purchase went up from eight purchases a month to 13.

With the increase of credit card usage in Australia, there has also come additional stress. The Australian Securities and Investments Commission (ASIC) conducted a survey about financial attitudes which found that 36 per cent of respondents felt stressed or overwhelmed when dealing with money.

To fully understand how to manage credit card debt and finances overall, it’s crucial to understand common credit score terminology. Here is a brief credit score glossary to look at some of the most popular credit score terms, with some help from the ASIC glossary.

Clear score

What does it mean to have a clear score? Credit Simple credit scores run from zero to 1,000. A clear score is more than 500. A good credit score is around 600-700. And an outstanding score is more than 900. You can read more on our blog about how to get a clear score.

Credit contract

A credit contract is made up of the terms and conditions that you agree to with a credit provider. This document, which is a requirement from the credit provider, includes the term, interest rate, fees, and other details of your loan.

Credit file

A credit file is held by a credit reporting agency, details your full credit history, and is used by lenders to make the decision of whether or not to approve a credit application. Every credit enquiry you have made, every default on repayment, and every late bill payment are all examples of the records on your credit file.

Credit guide

A credit guide is not the same as a credit contract. A guide is essentially all the information you need about the lender and the costs of loans they offer. Other information can include the lender’s licence number and external dispute resolution scheme membership.

Credit report

Also known as a credit reference, a credit report details your full credit history. This includes every application you have submitted for a line of credit, as well as if you have defaulted on payment. Credit reports are generated from a credit reporting agency.

Credit limit

Your credit limit on a given line of credit is the maximum amount you can borrow from that lender. Your credit limit can often be raised if you have made your payments on time.

Credit rating

A credit rating is also referred to as a credit score. This is the number you are given based on your credit history—your borrowing and repayment history. The details on your credit report or credit file inform your overall credit rating.

You can find more helpful information about credit scores on our site, or click here to check your credit score and see if you’ve got a clear score.

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So you want a clear score. Can payday loans stop you from getting one?

Credit Simple — Thu, 07 Jun 2018 19:48:30 +0000

Looking for a clear score but wondering if a payday loan could stop you from getting one?

Payday loans became prevalent as quick fixes for Australians in the 1990s, responding to the need for small, personal loans that banks and credit unions would no longer provide. Payday loans were frequently offered to people with bad credit or who didn’t have clear scores, making the loans even more ubiquitous. A small payday loan can be up to $2,000 and has a maximum term length of one year.

With soaring interest rates on these short-term, easy-to-get loans, people were burdened with more and more debt, unable to get out from under it. And payday loans have continued to be offered in Australia and are especially enticing to those with bad credit. Current statistics from Finder show that 60 per cent of payday loan borrowers have a bad credit history.

While payday loans are not always bad, they can stop you from having a clear score. Your credit score takes into account your entire credit history, which would include any payday loans you have taken out. There are a few things to keep in mind if you are planning to apply for a payday loan.

What are the negative effects on your credit score?

Payday loans can affect your credit score negatively in a few different ways. While many payday loans will not directly show up on your credit report, failing to meet repayments can result in a default – which most certainly will go on your record.

Additionally, applying for too many payday loans can lower your score and may look bad to future lenders. Ensure that you’re keeping tabs on the number of applications you’re filling out and continue to monitor your credit report for changes. You may also want to consider an alternative to a payday loan, like cutting back on expenses or asking friends or family for help.

Can payday loans help my credit score?

Payday loans may not always affect your credit score negatively. A payday loan could actually improve your credit score, as long as you make payments on time and pay it off within the term agreed upon. This shows up on your credit history as a positive thing; you were able to properly handle credit. This is what lenders want to see.

If you are worried about a low credit score, avoid taking out a payday loan. But if you must, like with any form of credit, as long as you make your payments on time and pay the loan off promptly, it can help fill your credit report with positive information. Credit Simple has more helpful information about credit scores, easily accessible online. You can check your credit score instantly, online and free right here at Credit Simple, and make sure you have a clear score by following the tips on our blog.

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