If you’ve ever discussed applying for a loan with a lender or broker, you may have heard the expression creditworthiness. Lenders use this to describe how trustworthy you are when it comes to repaying your loans. However, you don’t need to ask a lender to know if you’re creditworthy. You can get a free credit score report from any of Australia’s three credit reporting agencies.
Lenders also rely on these agencies and reports to determine your creditworthiness. Additionally checking your credit score has no impact on the score itself you can check your credit score for free once a year.
Where can I check my credit report for free?
You can get a free credit report in multiple ways. You can conduct a free quick online credit check on websites like RateCity. You can also request a copy of your credit report directly from one of the three credit reporting agencies. These agencies often don’t charge you for ordering and viewing your credit report online. They may, however, ask you to pay a small fee for a physical copy of your credit report. Also, if you check your credit score more than once a year, you may have to pay for subsequent credit checks.
When you request your free credit report, you’ll need to supply some personal information. This information includes your name, contact details, and drivers license number. If you don’t have a drivers license, there are other identity documents you can submit. If you have questions about your credit score, you should look at ordering a full credit report.
Not only does a credit report show credit score, but it usually also contains positive and negative credit transactions, typically covering the past five years. You should contact the credit reporting agency if you feel the information in your credit report is not accurate or needs correction in any way.
Why do I need a free credit rating check every year?
You don’t necessarily need a free credit rating every year, but it can help you stay informed. By getting a yearly free credit report, Australians can keep track of the impact of various financial transactions on their credit score.
A credit score is a commonly accepted measure of creditworthiness, so keeping an eye on yours will help you be more prepared. Your credit score is computed and rated differently by the three credit reporting agencies operating in Australia - Experian, Equifax, and Illion. These agencies collect information about you from banks and other lenders complying with the comprehensive credit reporting norms. Simply speaking, every time you borrow money from or repay money to any credit provider, an update is shared with these agencies.
A crucial part of comprehensive credit reporting is that you can find out which transactions affect your credit score positively as well those that have a negative impact. For this reason, you should get a free credit report once a year irrespective of whether you’re planning to apply for a loan or take on other debt. Checking your credit report can tell you if there are errors in your credit file, which affect your credit score and need to be corrected.
Borrowing money in one form or another is fairly common, but not many understand its full impact on their finances. For instance, you may be paying for utilities, such as electricity or water, or using a credit card for buying groceries or shopping for clothes. These payments and repayments affect your reliability as a borrower, especially if you miss paying a bill or fail to repay your credit card debt in full. Often, you don’t realise the impact of these actions until you apply for a loan or credit card. The lender may reject your application because they don’t consider you a trustworthy borrower.