Understanding Your Credit Report

  • Posted 30 Jul
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Understanding Your Credit Report

Getting your credit report, whether from Veda or from one of the other three reporting agencies, is often a necessary step before getting a loan. Whether it’s a car loan, home loan, or any other kind of loan, checking your credit history will help determine how ‘healthy’ your credit history is.

It’s important to understand what it is you’re looking at when you get your credit report, otherwise you’ll be going into negotiations blind.

Isn’t My Credit Report Just a Number?

A common misconception is that a credit report and credit score are the same thing; they’re not. A credit score is a single number that evaluates how good or bad credit is; kind of like a grade you might receive in a university class.

A credit report, on the other hand, is a detailed examination of all of the types of credit you have or had, when they were opened, when they were paid off, how regularly payments were made, etc.

In this way a credit report is like the teacher’s summary of a grade, showing every assignment, quiz, and test that led up to your final number, your credit score.

Your Credit Report: A Quick Look

Whether you’re discussing car finance or a home loan, it’s important to be able to identify what is and isn’t on your credit report. Every report will have your identifying information on it, including name, address, and other information to make sure that this report is actually about you (after all, there are a lot of John Smiths in Melbourne, but only one John Quincy Smith that lives at a given address and who was born on October 5, 1987).

The report will list your accounts in good standing, your accounts that have negative amounts, as well as inquiries to open new lines of credit, loans on property, payments made, and any bankruptcy filings.

In short, the report will list everything of significance your money has been doing.

These reports aren’t life long though. Open accounts will remain on the report as long as they’re still open, which means that as long as you’re still using your credit card or that loan on your car hasn’t been paid off, it will keep showing up on your report.

Accounts that have been closed tend to stop being reported after 10 years, including loans that have been paid off, credit cards that have been closed, etc.

If you default and file for bankruptcy, it will stop being reported after 10 years as well, but for those 10 years it will be a big, red mark on your credit report.

How Do I Get A Copy of My Credit Report?

Every Australian resident is entitled to one annual credit report free of charge.

Simply contact Veda, Experian, or Dun and Bradstreet, order your credit report, and the document should be in your hands within 10 days’ time.

Once you have your credit report in hand there’s no reason to hold back on getting that home or car loan you’ve been thinking about, either.

For additional financial advice and insight regarding your credit, speak to one of our team today and go after the loans you need to get what you want today.

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