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Why Should You Check Your Credit Report

Why Check Your Credit Report?

But have you ever seen your own credit report before? Some people go through their whole lives without ever checking your credit report.

If you are thinking of taking out a bad credit loan then you might not be bothered about your credit report. After all, you don’t need a good score for this type of loan. Yet, there are still some good reasons for checking out your credit report now and then.

How To See Your Credit Score?

Are you intrigued by the idea of finding out your credit score? This is an overall figure that shows how good or bad a risk you are considered to be for lenders. It may also be used in situations such as when you ask for a utility or phone contract to be set up.

Your credit score will be somewhere between 0 and 1200 if you get it from Equifax, which is the biggest credit agency in Australia. Other agencies go up to 1,000.

How do you know whether your score is good or not? We will use the Equifax 0-1,200 scale here for consistency.

Under 500. This is a poor score. A lender that sees a number as low as this is going to view you as a big risk.
500-620. This is a sort of average score. You will struggle to get a bank loan with a number as low as this.
621-830. You are now in the good / very good range. A lender will probably look favourably upon your application, as you seem like the type of borrower who is unlikely to default on a payment.
831 and above. If your score is as high as this then you are considered to have an excellent credit score. You are in the top 20% or so of the population, so it is going to be easier for you to convince lenders to trust you.

Why is it important that you know this number? Well, you might need to get a bank loan at some point. A bad credit loan with no credit check is perfect for many situations. Maybe you need to pay an unexpected bill or just need to get through to the end of the month.

However, there may come the time when you need a mortgage or a big loan to buy a new car. In either of these cases, you probably need to get a loan from a bank or some other lender of this type, as you will need a long repayment period.

If you have neglected your credit score for years then you could be in for a nasty surprise when you need to arrange a loan. Therefore, it makes sense to check it out once a year or so, even if you have no immediate plans to borrow money.

Make Sure Your Personal Details Are Correct

Your credit report will include your name, address and date of birth. If any of this information is incorrect then it will affect your future credit applications. You should take steps to get it sorted out as soon as you can, rather than leaving it until it becomes urgent.

See What Loans and Credit Applications Are Listed

This is a way of seeing all of the previous loans and credit applications that are registered against your name. You will also see your payment history, so if you have ever paid a loan late then it will show here.

It is worth pointing out that loans arranged without a credit check aren’t listed here, so they don’t affect your credit history. If there is anything listed here that you don’t agree with then you will want to quickly get it sorted out.

What If My Credit Score Is Bad?

Let’s imagine that you check your credit report and get a nasty shock. You might discover that you have a poor score of under 500. The good news is that you can do something about it. There is no need to think that you just need to settle for this low score.

Your first step is to sort out any loans that are in default right now. Then you will want to put a plan in place to make sure that you don’t fall behind again in the future. To be fair, this is a smart move to make at any time, anyway.

If you need money urgently then a bad credit loan can help you out. In fact, this can be a good way of getting back on your feet so that you are better set to keep your finances back under control in the future.

What If My Details Are Wrong?

As we saw earlier, there is a chance that some of the details on this report are wrong. If this is the case then you should get in touch with the credit agency to point out the error.

Naturally, there will be cases in which you need to provide proof of what you are saying. The ideal first step is to send a letter that explains everything together with the evidence that backs it up. However, this is something that it can take some time to sort out, so you may need to show some patience.

How to Order Your Credit Report

You need to pay a relatively small fee to get hold of your current credit report. As mentioned earlier, the biggest company is Equifax. You can see on their site how to get hold of your credit report.

At the time of writing, the basic membership from Equifax costs $4.95 per month. You can also ask for a premium account for $9.95 each month or a more complete version at a monthly cost of $14.95. Each of these packages has a different set of terms.

The site for the Office of the Australian Information Commissioner gives you contact details for Equifax as well as for Experian and illion, who are other widely-used credit reporting bodies. They also list the information you will be asked for to confirm your identity when you get in touch.

Be sure to check your credit report now and then, as you will want it to be in good shape for whenever you might need it.

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