FAQ Archives - Credit Simple

How to fix your credit score in 5 easy steps

Credit Simple — Thu, 05 Dec 2019 14:34:34 +0000

Now that Australian banks are including positive credit behaviours in their reports to the credit bureaus, it’s much easier than it used to be to fix your credit score.

So even if a few late payments or even a default knocked you back a few points, there are ways to work your way back into better credit territory.

Here are the steps you’ll need to take to fix your credit rating and get it pointing in the right direction.

1. Know thy credit score

It’s hard to get from point A to point B if you don’t know where you currently stand. Credit Simple gives you your credit score – courtesy of credit bureau illion – in the form of a dial that shows you how far away you are from a perfect credit rating.

You can also see your credit report, which contains the actual loan records that illion uses to calculate your credit score. That means you can see exactly what’s helping it and exactly what’s hurting it.

There are other credit bureaus in Australia and you can request your credit score and credit report from any one of them.

2. Dispute any reporting errors

If your report says you defaulted on a payment to your mobile phone company but you know you never did, you can take it up with the credit bureau or the phone company itself. Same with other lenders.

They’ll investigate the matter and remove the negative incident if they find there’s been an error.

Credit Simple conveniently lets you raise a dispute right through the website.

3. Fix your own mistakes

Look through your credit report and see if there are any late payments you may have forgotten about.

If a late payment of $150 or more is more than 60 days overdue, your lender can report it as a default. This will stay on your record for five years, so you can see how important it is to nip late payments in the bud.

4. Pay your bills on time

Now that you’ve cleared up any errors and took steps to minimise further damage, it’s time to start building your credit score back up. The good news is that Australia’s new credit reporting scheme rewards you for doing the bare minimum of paying your bills on time!

The easiest way to do this is to set up direct debit. This will allow your payments go through automatically while you sit back and watch your credit rating start to tick back upward.

5. Stay credit active

Lenders want to see that you’re a responsible borrower and the only way to prove that is to have a healthy amount of debt (and of course, to make your payments on time). Certain loans, like home loans, will often boost your score just because you have it.

Others, like quick cash loans or certain credit cards, will lower your score temporarily. However, if you pay them on time they can serve as a good stepping stone toward the more desirable loans and your score may eventually rise even higher than before.

Fixing your credit score is easier than ever

Unless you have a perfect credit rating, there’s always room to improve. And with positive credit reporting happening in Australia, fixing your credit score is easier than ever. There’s no better time to get started than now – the future you will thank you.

The information in this blog post is general in nature and does not constitute personal financial or professional advice. It is not intended to address the circumstances of any particular individual. We do not guarantee the accuracy and completeness of the information and you should not rely on it. Before making any decisions, it is important for you to consider your personal situation, make independent enquiries and seek appropriate tax, legal and other professional advice.

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Knowing what affects your credit score will give you the power to improve it

Credit Simple — Wed, 04 Dec 2019 05:00:51 +0000

In the old days, only negative borrowing patterns – think late payments and defaults – could affect your credit score, also known as your credit rating.

However, just recently, Australia joined the 21st century and implemented a scheme called Comprehensive Credit Reporting (CCR). That means positive borrowing patterns – like making your payments on time – can help your score tick back upward.

The positive and negative factors that affect your credit score

Before we jump into the nitty gritty, this infographic should give you a good idea of which behaviours to avoid and which behaviours to favour:

Negative behaviours that affect your score

Even with the CCR, negative borrowing behaviours still have an impact on whether or not lenders give you money. Negative examples include:

Bankruptcies. These stay on your credit rating for two years after the bankruptcy ends or five years from the date you became bankrupt.
Defaults. Debts worth $150 or more that are at least 60 days overdue may be reported to a credit reporting agency and stay on your file for five years.
Late payments. Forgot to pay a bill? It shows up on your credit rating even if you settle the debt before it becomes a default.
Writs, summons and court judgements. Any court appearances relating to debt and the resulting decision negatively affect your credit rating.
Too many credit enquiries. If you apply for credit multiple times in a short space of time, it suggests you’re desperate for cash.
Bad Debt. The bureaus consider certain types of loans to be indications of bad borrowing behaviour, for example quick cash loans. Even having credit cards can bring down your score.

Positive behaviours that affect your score

It’s not all bad news. Some credit information can help improve your credit score, such as:

Repayment history. An established trend of punctual payments is a boon for your credit rating.
Account opening and closing dates. Lenders can see where, when and how often you’ve been extended credit in the past.
Type of credit facility. Whether it’s mobile phone bills, utilities contracts or other types of account, organisations can better understand your financial situation if they have more info.
Your credit limits. Again, any information on your current creditworthiness among other lenders is useful for accessing credit from other organisations.
Good Debt. Some types of loans will bring your score up. Home loans, student loans and business loans are all examples of loans that make you look like a responsible borrower.

How is your credit score calculated?

There are three major credit bureaus in Australia and each of them calculate their scores differently. Just look at the scales each bureau uses differ:

illion: 0-1000
Experian: 0-1000
Equifax: 0-1200

Each of these bureaus have developed their own algorithms that take the positive and negative behaviours described in the previous sections, weight those behaviours according to the importance the bureaus place on them and calculate your score accordingly.

Although the bureaus don’t publish these formulas publicly, you can be sure they all largely consider the same positive and negative behaviours discussed. You can also dispute entries on your credit file if you think there’s an error.

Credit Simple offers free, convenient access to your illion credit score. So feel free to have a dig around your file and get a feel for what types of activity the bureaus consider when calculating your score.

Check score

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What is a good credit score in Australia?

Credit Simple — Thu, 28 Nov 2019 16:00:39 +0000

What is a good credit score in Australia?

Your credit score, which is sometimes referred to as your credit rating, will generally range from 0 to either 1,000 or 1,200 depending on the credit bureau calculating it. In all cases, the higher the score, the better.

To make it easier to visualise, we’ve provided the table below to help you understand what constitutes a good credit rating in Australia – bureau by bureau.

If you want to see how your score stacks up to the scores below, simply sign up or login to Credit Simple to see your illion credit score for free forever!

Here’s a breakdown of credit score ranges from the three major credit bureaus in Australia:

Credit Score Range	illion score via Credit Simple	Equifax	Experian
Excellent	800 – 1000	833 – 1200	800 – 1000
Very good	700 – 799	726 – 832	700 – 799
Average	500 – 699	622 – 725	625 – 699
Fair	300 – 499	510 – 621	550 – 624
Low	0 – 299	0 – 509	0 – 549

Using illion as an example, here’s what appearing in each credit score range (as well as getting a perfect score) could mean for you and your finances.

Credit score 1,000 (perfect score)

If you scored 1,000, you’re seriously a credit unicorn and appear in a very exclusive club consisting of just 3.5% of all Aussies.

You’re likely in an older age bracket and have spent a lifetime building positive credit actions, such as prompt payments, sensible applications and limiting your lines of credit.

You’ll have good bargaining power when it comes to taking out a loan, and shouldn’t have any trouble landing lower rates and better terms than your peers.

800 – 999 (excellent)

For all intents and purposes, a personal credit score above 800 might as well be a perfect score since it represents a strong credit history built up over time.

Lenders should be eager to offer you credit as long as it’s within your ability to pay off, with attractive rates and terms.

700 – 799 (very good)

With a personal credit rating in this range, you should have no problem getting a loan as long as you have the ability to pay it off. You might not get the same great rates as someone with an excellent score but you shouldn’t do too badly either.

In many cases, all you have to do to improve your rating is to limit the number of credit applications you make, because making too many can bring your score down.

500 – 699 (average)

An average score is actually a fairly healthy score and in most cases means you haven’t experienced any major credit mishaps, like defaults or bankruptcies.

Avoiding late payments and limiting the number of credit applications you make are two great ways to bring up your score.

300 – 499 (fair)

This credit score range is below average, but you probably don’t have any extremely negative problems with your report, such as a bankruptcy.

In fact, you may just be in a younger age bracket, which lenders classify as riskier. Tighten up slightly on your credit behaviour and you should see improvements before too long.

0 – 299 (low)

If you’re here you probably have payment defaults or other negative data on your file. If that’s not the case, then it could be because you consistently pay your bills late.

In any event, this is considered the riskiest group to lend to so you’re better off trying to improve things sooner rather than later.

Paying your bills on time will actually improve your personal credit score, so automate your credit card and other loan payments. Avoid making multiple credit enquiries and wait for any defaults to be cleared from your record, a process that can take up to five years.

Check score

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Why did my score decrease?

Credit Simple — Mon, 12 Nov 2018 00:30:18 +0000

Have you noticed a dip in your credit score? This could mean many different things. The amount of credit you have, the age of your credit or any altered credit limits could all make your score go down.

Comprehensive Credit Reporting (CCR) changes in Australia made earlier this year could impact your credit score as well.

While there are many possible reasons why your report changed, let’s look at these common factors.

Comprehensive Credit Reporting changes

As of July 2018, CCR changes were implemented nationwide. Under this system, lenders can see more positive information about your financial history. This means they can have a more accurate snapshot of your credit behaviour.

Before CCR, most of the information on credit reports was negative. For example, late payments, defaults or bankruptcies showed up. Incorporating positive information, such as on-time payments, quick default recover and responsible credit behaviour, will now be visible to lenders.

According to MoneySmart, new information that may affect your credit score includes:

The type of credit you’ve held in the last two years.
Your usual repayment amount.
Your repayment habits: frequency and whether you pay on time.

Other common factors in a credit score reduction

There are several other reasons that your credit score may decrease from one month to the next. Here’s a look at common factors.

Recently applied for credit

Credit scores include information about recent credit applications. If you have applied for a personal loan or another credit card, this could make your score dip. Try to limit your enquiries for new lines of credit.

Age of credit

Lenders like to see that you’ve had credit for many years. If you’ve handled credit responsibly over that long period, lenders are more likely to “reward you” with a boost to your credit score.

Change to credit limit

Under CCR, lenders can see more positive information about your financial history.

If your credit limit was recently raised by a lender, this could be a reason your score dipped. Money Smart says that one way to get a higher score is to lower your credit card limits.

Late payment

Did you make a late payment recently? While this isn’t the end of the world, it could affect your credit score negatively. Start making each and every payment on time and you can make up for the loss in no time.

If you’ve noticed a decrease in your credit score, try not to fret over it too much. By building up responsible credit behaviour over several years, you can get those numbers higher and look more attractive to lenders.

For more information about changes to your report, contact Credit Simple. We provide free credit scores as well as benefits for members. Sign up today!

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Help! Nothing has changed on my credit file, but my score has changed. Why?

Credit Simple — Sat, 29 Sep 2018 00:25:40 +0000

So your credit score has changed, but you can’t see anything immediately obvious on your credit history to indicate why it’s different?

There are a few reasons why your credit score can change, even though it doesn’t look like anything has changed on your credit history. Some of the reasons why your credit score may change are:

Data is only held on your credit file for a certain amount of time, something that is decided by privacy laws. A default from 10 years ago (for example) won’t affect your credit rating today. Information can drop off your credit file as it gets older, which can change your credit score.
How old your credit information is can also have an effect on your score – for example, a recent loan enquiry is more relevant than one you made four years ago.
Credit providers sending monthly payment data to a credit bureau can also affect your score, as changes in the payment status of your account(s) happen. Even if you’ve been paying on time, the length of time you’ve been up to date could have an influence on your score. If you have specific questions about your credit file, you can email creditsimplesupport@illion.com.au or call us on 1300 414 170.

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Comprehensive Credit Reporting – what’s changing (and how it may affect you)

Credit Simple — Wed, 12 Sep 2018 20:05:40 +0000

You might’ve heard talk about Comprehensive Credit Reporting being a ‘thing’ in Australia. It sounds complicated (and let’s face it, probably a bit boring). So what is it, and how could it affect you? And how can you get the most out of it so that you may be able to keep more money in your own pocket?

Comprehensive Credit Reporting – what it is and how it works

Credit reporting used to be about people doing ‘bad’ things (such as neglecting to make a payment). But with CCR, the ‘good’ things (such as when someone makes regular payments) are possibly starting to be fed into your credit history. CCR will help to build a more thorough picture of your credit information, which may make it easier for you to quickly build a credit file showing consistent repayment history, as well as showing when someone has recovered quickly after a negative event such as a default.

Want to know more about Comprehensive Credit Reporting? Download our free ebook here.

What’s changing – and how it may affect you

From this month, the major banks such as ANZ, CBA, Bankwest and Westpac will be following NAB’s lead and contributing more ‘positive’ information on your credit card accounts to credit reporting agencies such as illion, and this may affect your score. This is in addition to positive information that has previously been contributed by other credit providers that you may already have seen on your credit report. You’ll start to see more credit information within your Credit Simple dashboard.

This information may include:

– Dates you opened and closed an account

– Type of credit account you hold

– Your credit limit (this will be reported and may be visible on your credit report)

– Your monthly repayment history

How you can get the most out of Comprehensive Credit Reporting

CCR could be a good move for consumers, as it builds a more robust and detailed picture of your credit habits – basically, whether or not you’re a good customer when you’re using credit. It’s thought that overall, this will increase competition among the major lenders, making risk-based pricing more feasible, and consumers like you could stand to reap the benefits of a more competitive market. Here at Credit Simple, we encourage Aussies like you to use their credit score to negotiate better deals, which may keep even more money in their own pockets and help them get ahead financially.

It’s a good idea to keep tabs on your credit score, so log in and check your dashboard to see if anything’s changed.

More on Comprehensive Credit Reporting and how you can get a better deal:

CREDIT RATINGS
New laws will allow Queenslanders to use their credit rating to potentially save on home or car loans. #9News | http://9News.com.au
Posted by 9 News Queensland on Tuesday, October 9, 2018

See my score and information
See my offers

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Is Credit Simple legit? Our response to reviews on ProductReview.com.au

Credit Simple — Sun, 13 May 2018 20:26:12 +0000

Welcome to Credit Simple. If you’re reading this blog, chances are you’ve found your way here after asking a search engine if our business is legitimate. Indeed, we’ve had some pretty bad reviews on sites such as ProductReview.com.au. So we thought we’d give you the low-down on myths and truths about our business, credit scores, and your rights and privacy.

I think your business is a scam and you’re ‘phishing’, or conducting identity theft

None of the above. Credit Simple is owned by illion, a data analytics company, and we adhere to all relevant legislation. Credit Simple is not a scam and never engages in ‘phishing’. As a credit score business, we take your privacy extremely seriously and we’re also big on consumer rights. Our parent company is a credit reporting agency, and credit reporting is an area that’s tightly regulated, and the industry has to toe the line at all times. Your information is kept secure and we don’t sell your information to anyone. Only you can see your credit report and if a credit provider wants to check your credit, they have to advise you that they intend to do so, and you need to agree to the credit provider doing so. We have lots of information about rights and privacy on our blog under the ‘FAQ’ tag here and you can read our privacy policy here.

I can’t believe you’re using my star sign to calculate my credit score!

That’s a common myth. Your star sign isn’t used to calculate your credit score at all. When you’re in the Credit Simple dashboard, you’ll see stats about how you compare by age, gender, star sign and so on. This is simply a comparison tool for your interest – a novel way of looking at how you measure up to other people like you.

If I check my credit score with you, will it lower my score every time I look?

Not at all. You can check your own score as often as you like and it will never affect your score. A credit provider checking your credit file is called an ‘enquiry’ but if you check your credit, it’s called an ‘access’ and that doesn’t affect it. However, if you apply for lots of credit with a credit provider (e.g. a credit card or loan) within a short space of time, your credit score can go down for a while, as it makes you look ‘desperate for credit’ to credit providers. It’s best to shop around for credit first and figure out what suits you best before applying for anything.

The credit score you gave me is different to the one I got from another service

Yep, that can happen. In fact, it’s highly unlikely that you’ll have the exact same credit score from any two providers. Each credit reporting agency has its own way of calculating credit scores, and each company also has a slightly different set of data. To add to that, our credit score range is 0-1,000, whereas other companies have ranges that run higher than 1,000. In an ideal world, consumers would be able to see a credit score that pulls on all possible/available credit scores, but as yet, this service doesn’t exist.

I own a mortgage-free property and have cash in the bank, but my score is really low

Credit scores are calculated based on credit you’ve accessed, rather than assets you own, so your mortgage-free house or your savings account aren’t put into the calculation. Credit reporting agencies simply don’t have access to information about your assets. While this information would be beneficial when applying for credit, it’s not information held by a credit reporting agency.

Has the credit reporting system changed?

Credit reporting has recently changed from a ‘negative’ system (where you got penalised if you did something naughty, but otherwise were treated much like the next person) to a ‘comprehensive’ system (where your ‘positive’ payment information is now being put into your credit score calculation). In February 2018, NAB became the first major Australian bank to contribute positive payment data, so it’s still a very new system in practice.

Someone else’s information is on my credit file!

In a very small number of cases, there can be mistakes on your credit file. We’ve built in a way for people to question something if they think it’s incorrect (you can see this within the dashboard – look for the button that says ‘question this’). To date we’ve had less than 1% of Credit Simple users query something. If you need help getting something sorted out, email us on creditsimplesupport@illion.com.au or call 1300 414 170.

Still got questions? Check out the FAQ content on our blog. Talk to us. Email us on creditsimplesupport@illion.com.au. We’re happy to help. Not signed up yet and want to check your credit score? You can do that right here – it’s easy, instant and free (forever).

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How does my credit score affect mortgages and other loans?

Credit Simple — Mon, 01 Jan 2018 05:36:32 +0000

The majority of purchases we make in our lifetime are affordable enough for us to either buy outright or save towards over time. This is rarely the case for high-value assets such as houses, cars and other expensive items.

Statistics show that the average property price across Australia’s capital cities reached $625,000 in July 2017. A new vehicle is cheaper (and cars are apparently more affordable than ever before, but still a considerable expense nonetheless.

Even renting an apartment comes with significant upfront costs such as agency fees, bonds and any monthly rent paid in advance.

Dwelling values higher over the month in all capitals except Brisbane, Perth & Darwin | https://t.co/cEP5lr7sJt #ausproperty #propertyau pic.twitter.com/se6aLUKFXu
— CoreLogic Australia (@corelogicau) August 1, 2017

So, unless you want to spend the next few decades saving for your first home or car, you’ll likely need access to credit to get the ball rolling.

What kind of credit score do I need?

It goes without saying that your credit score must be in better shape for a home loan approval than it does for a new credit card or mobile phone contract.

However, there’s no one-size-fits-all answer for what credit score you need to gain approval. That will depend on various factors, including your credit rating, your recent activity, the financial institution’s internal assessments and whether or not you’re applying to a traditional lender.

If you’ve already been rejected for a mortgage or other high-value loan, please click here to read our blog on ways to improve your credit rating. A few simple changes could dramatically increase your chances of securing credit.

Buying your first car, or know someone who is? It's a big decision with a boot-load of costs. More here : https://t.co/FenGo6mxBf pic.twitter.com/nSYEyE3uRF
— MoneySmartTeam (@MoneySmartTeam) August 9, 2017

What is considered a good credit rating?

We may not be able to give you an exact figure for the kind of credit score you’ll need to buy a home, rent an apartment or purchase a car. But we can give you a rough estimate of how lenders may view your current rating.

0-299: Unfortunately, you have a low credit rating and will struggle to obtain credit, especially for home loans and similar forms of borrowing.

300-499: We call this the ‘room to improve’ category. While not in the upper echelons, you probably don’t have any huge black marks on your report, but mortgage lenders may still view you as a risk.

500-699: This is an average rating, so your likelihood of securing a mortgage or personal loan may rely on individual factors and the lender’s specific criteria.

700+: You have a good to great credit rating and financial institutions will view you favourably when applying for mortgages and personal loans.

We hope this has helped you understand how your credit rating relates to big-ticket purchases such as homes and cars, but if you would like to learn more, please click here.

What kind of credit rating do you need to secure a mortgage? Let’s see.

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How do I know if I have a bad credit score?

Credit Simple — Sun, 31 Dec 2017 22:01:38 +0000

Is 600 a bad credit rating? How about 500? Or 400?

Without context, calculating your creditworthiness based on your score alone is difficult. Fortunately, we’re here to help you better understand your credit rating, particularly if you suspect you have a bad score.

Repayment history information, including any late payments, stays on your file for two years before you’re free and clear.

The good, the bad and the ugly

Your illion credit score via Credit Simple ranges from 0 to 1,000. The closer you get to zero, the less creditworthy you are deemed to be by banks and other lenders.

But at which point does your score sink from good to bad (via so-so)? Here’s a quick rundown of our scale from first to worst:

700 and above: Be proud. You’ve got a good or great score.
300 to 699: Depending on your exact rating, you range from slightly below average to average.
1 to 299: We can’t deny it. You have a bad credit score.
Zero: Oof. Your credit rating is in a state of emergency.

Why do I have a bad credit score?

If you’re at the lower end of the scale, you’re probably wondering what you’ve done to get a bad score and how long it will take to rectify.

You may need to request your credit report for a full breakdown of your financial situation, but bad scores are usually due to:

Late and missed payments
Credit defaults
Bankruptcies
Writs, summons and court judgements
Multiple credit enquiries in a short space of time
Debt agreements.

Repayment history information, including any late payments, stays on your file for two years before you’re free and clear.

You’ll have to wait five years to survive some of the more serious black marks on your record though, such as defaults, bankruptcies, writs, summons and court judgements. Credit enquiries also remain for five years.

Can I still access credit with a bad score?

On a good day, a bad credit score means you’ll struggle to get the best deals, but you also risk your applications being rejected entirely.

However, some lenders specialise in mortgages and loans for people who have a less-than-stellar credit rating, although you’re likely to face much higher interest rates.

Credit cards are particularly difficult to obtain with a bad credit rating, and every rejected application could bring down your score further.

Which is why you may want to spend some time building up good credit karma to balance out any black marks on your file before attempting to borrow.

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Where can I get my credit report?

Credit Simple — Sun, 31 Dec 2017 21:51:53 +0000

Where can I get my credit report?

Keeping tabs on your credit score is crucial if you have hopes of funding some of life’s biggest purchases, such as a house or car.

But what about your credit report? If you’re not sure of the difference, don’t fret, as we’re about to give you a crash course on credit scores and credit reports, including how you can get your hands on them both (for free).

Your report contains all the information that lenders have regarding your past credit behaviour.

Aren’t credit reports and credit scores the same?

No.

Your credit score is a number that summarises your creditworthiness to lenders. This score – also known as a credit rating – provides you with a quick and easy way of judging whether or not you’ll be offered the best deals on loans and other forms of credit.

A credit report is a different kettle of fish. They provide a comprehensive overview of your entire credit history. If you want to know all the ins and outs of your past activity you’ll need to access your credit report.

How do I get hold of my credit report?

You can obtain your credit score for free simply by clicking here and following the instructions.

You’ll receive your rating, as well as an analysis of how your creditworthiness compared to other people in your area, age group and even star sign. Cool eh?

For your credit report (which should also be free), you’ll need to get in touch with one of the credit reporting agencies, such as illion, Experian or Equifax. You can also access most of your key credit information through the ‘credit history’ tab on your Credit Simple dashboard.

Unlike your credit score, which is almost instantaneous, there’s a chance you’ll have to wait for a few days before your report arrives. But it’s often worth the wait if you want the nitty gritty details of your credit history.

Some credit reporting agencies may charge fees if you want your copy quickly. But with Credit Simple it’s always free for you.

Did you know you can get a free copy of your credit report each year? Our article explains why you should https://t.co/Lq61eli5zY
— MoneySmartTeam (@MoneySmartTeam) July 17, 2017

What information is in my credit report?

Your report contains all the information that lenders have regarding your past credit behaviour, including:

Personal details
Credit applications
Defaults and other infringements
Your repayment history, excluding mobile phone and utilities bills
Credit cards held
Late payments and settled arrears
Joint accounts
Debt agreements.

Before the credit reporting agency will release your file, you must supply your personal details, as well as information on your current employer, a copy of your ID and a utilities bill or similar document from an official agency.

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