How can I get my free credit report?

How can I get my free credit report?

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.

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Learn more about credit score

What are some advantages of a good credit score?

You should know about the advantages of credit score improvement as there are many occasions when having a good score is helpful. If your credit score is categorised as good, very good, or excellent, it can indicate you have strong borrowing power. This may encourage lenders to give you special discounts on interest rates and other loan terms. You may also find it easier to get approved for a credit card or a property rental. You can also try to negotiate terms using your superior credit score as leverage.

A high credit score indicates that you are financially responsible, but it requires you to be disciplined. If you currently have a good credit score, you still need to remember not to apply too often for credit cards or loans as these can quickly pull down your score. On the one hand, you may have better access to credit, but your good financial habits mean that you may not need to access this credit. Having some credit products can help build up your credit report, and therefore your credit score. You would just need to keep the debt and limits to a minimum and pay the bills on time. It’s never advisable to take out credit that you can’t afford to pay as it negatively impacts your credit history.  Even if you have a good credit score, you can always improve it further.

Does borrowing money affect credit score?

Whether it’s through a home loan, a personal loan, or a credit card, borrowing money will affect your credit score. Taking on a home loan or a credit card may have a positive impact on your score, but too many loan applications can bring your credit score down.  

Every time you apply for credit, an inquiry is performed against your name. Too many inquiries can reflect negatively on your credit report, and if your loan application is rejected it will negatively impact your credit score.

How you handle your debt can also make a big difference. As long as you make timely payments you may be able to improve your credit score and overall creditworthiness. However, any missed or delayed payments will likely result in a negative impact on your credit score.

Can I check my credit score without a driver's license?

In Australia, your driver’s license is the preferred identification document for credit reporting agencies. This means you may not be able to confirm your identity using another document, such as a proof-of-age card. You may have genuine reasons like concerns over identity theft for not wanting to provide your driver’s license number. Unfortunately, most credit bureaus won’t allow people to check their credit score without a driver’s license. 

If you don’t have a driver’s license, there’s a good chance you haven’t applied for credit in the past and don’t have a credit score at all. In case you are concerned about identity theft, credit reporting agencies can offer you paid packages that include insurance against identity theft. Such packages may also include monthly credit score checks or alerts whenever your score is updated.

Do landlords check credit scores?

For landlords, credit score checks can tell if a potential tenant has a history of delayed or missed rent payments. Usually, a poor record of repayments is likely to result in a low credit score. Also, your credit history may include information from tenancy databases such as the number of times landlords have inquired about your credit score. 

If there are too many inquiries within a short time, landlords may conclude that you have had issues renting in the past.  However, there is no rule as to when landlords check your credit score. Some might check every time they receive a tenant’s application. In some cases, landlords may even rent out their property to tenants with a poor credit history if they can submit additional documents or sufficiently explain their situation and how they are trying to address it.

 What credit score do landlords look for?

Landlords may look for issues relating to repayment rather than a specific credit score, although a low credit score probably suggests that you’ve had repayment issues. In general, if your credit score is categorised good, very good, or excellent - which corresponds to an Equifax credit score range of 622 - 1,200, landlords may not scrutinise your credit history too closely.

Does home loan pre-approval affect credit score?

Home loan pre-approval can give you a better idea of the amount you can spend when buying a property. It can also tell you about the steps you need to take to finalise your home loan and receiving the funds. Depending on how you approach a lender, pre-approval could include a credit inquiry which does affect your credit score. Some lenders, however, may offer an online pre-approval which is faster and doesn’t involve a credit history check. An online pre-approval may only consider your financial capacity and offer suggestions on how to prepare yourself to take a home loan.

Most lenders, however, will likely prefer to make a full assessment of your financial situation by requesting a credit report in addition to your bank statements and tax returns. Such a credit inquiry, sometimes called a hard pull, is usually recorded on your credit file and can therefore affect your credit score. If you approach several lenders and all of them initiate credit inquiries, this will impact your credit score negatively. Sometimes credit reporting agencies make an exception in terms of including multiple credit inquiries if they are made within a certain period. It would still be best to avoid making multiple applications with different lenders.

Can a debt collector affect your credit score?

When a creditor is unable to contact you by phone or by sending you a formal notice in regards to outstanding debt, they will often outsource the job to a debt collector. The debt collector can try to reach you by phone, or they can attempt to contact you face to face. If they cannot get through to you by either method, they can only report back to the creditor but not directly report a payment default to the credit rating agency. So, can debt collectors affect your credit score? No, they cannot do so directly.

However, if you owe money, you have an obligation to return it or communicate your difficulty in doing so to the creditor as well as to any involved debt collector. If they cannot contact you, they can report a serious credit infringement against you, which may affect your credit score for many years. Creditors can also take the legal route, and a court judgment against you can also severely impact your credit score.

You should remember that debt collectors need to abide by specific rules and cannot harass you by repeatedly calling or visiting you, or by threatening to confiscate your possessions if you don’t pay up. Similarly, they cannot threaten to file a default against you, especially with a credit bureau.