Credit Scores 101 [Infographic]

Do you know your credit score or why it matters? Your credit score is important as many lenders use it to understand your past credit profile. This infographic helps explain the basic facts you need to know about credit scores and how they might affect you.

How is your score calculated?

Your credit score can be affected by a range of factors, including:

an icon of credit score chartan icon of a clockan icon of 2 bills statementan icon of court paperworkan icon of court paperworkan icon of a laptop

Who looks at your credit score?

These are just some of the places:

an icon of a bankan icon of rental keyan icon of a security shield

  Your credit score is important as many lenders use it to understand your past credit profile. 

It can determine your ability to:

an icon of credit cardsan icon of a home with electricity connectionan icon of a house for rent

4 facts on defaults

an icon of a default notice lettericon number 1 illustrating fact number 1icon number 2 illustrating fact number 2

Credit scores- by the numbers

a chart illustrating the increase percentage of aussies who have never accessed their credit reportAn icon of $150 illustrating the minimum amount of consumer debtAn icon of number 5 illustrating the number of years defaults can stay on your report

 

View the accessible text version of the infographic below or download the PDF version.

How is your score calculated? Your credit score can be affected by a range of factors, including:

  • Numerous credit enquiries in a short time frame
  • Nominations to be a guarantor
  • Overdue debts and defaults (listed for 5 years)
  • Bankruptcy (listed for 10 years and under)
  • Late payments for mobile phones, electricity and gas services
  • Interest-free store finances
  • Court writs or judgements

Don't have your credit report? Get it free from a credit reporting bureau such as Equifax (previously known as Veda).

Who looks at your credit score? These are just some of the places:

  • Banks
  • Rental agents
  • Insurance companies

Your credit score is important as many lenders use it to understand your past credit profile. It can determine your ability to:

  • Get a home loan or credit card
  • Obtain insurance
  • Connect electricity or gas
  • Rent a house

4 facts on defaults:

  • Fact #1: You can default on credit card payments, mortgages or even bills
  • Fact #2: Lenders issue a default notice when you fail to pay debt that is due
  • Fact #3: Legally, lenders must contact you multiple times to chase up your payment
  • Fact #4: If you still fail to repay the amount, a default could be listed on your credit file.1

Received a default notice? Keep calm. Just because you receive a default notice, It does not mean it will be listed on your credit report

Credit scores - by the numbers

  • 71 is the percentage of Australians who have never accessed their credit report.2
  • $150 is the minimum amount of debt for a consumer default notice.3
  • 60 is the number of days overdue before a consumer payment default can be listed.3
  • 5 is the number of years defaults and credit applications can stay on your report.4
  • 30 is the percentage of Australians who accessed their report and found mistakes on it.5

Having trouble securing a home loan? Unlike many lenders, Pepper doesn't use an automated credit scoring system for your credit application. Instead, we look at your individual circumstances to get to the root of your credit history and your financial position today.

For more information about our home loan products, call us on 13 73 77 Monday to Friday between 8:00am and 6:00pm or enquire online and a Lending Specialist will be in touch. 

Interested in learning more? Take our What's your credit rating IQ quiz? or read our 7 fast facts about credit scores.

Sources:
1. www.oaic.gov.au/privacy/privacy-archive/privacy-resources-archive/when-can-a-default-be-listed-on-my-credit-file
2. http://www.experian.co.nz/media-alert-two-thirds-of-australians-unaware-of-credit-reporting-improvements/
3. 
https://www.oaic.gov.au/individuals/privacy-fact-sheets/credit-reporting/privacy-fact-sheet-35-when-can-a-default-be-included-in-your-credit-report
4. www.moneysmart.gov.au/borrowing-and-credit/borrowing-basics/credit-reports
5. www.choice.com.au/money/credit-cards-and-loans/home-loans/articles/ how-to-protect-your-credit-rating

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