Take a few minutes to read through our introductory guide on understanding, building, and improving your credit score!
To kick things off, we’ll go over the basics
What is a credit score?
Your credit score or credit rating is a score that is calculated from the information held about you by the credit reporting bodies in Australia, regarding your credit activity.
Some of this information includes:
-The quantity of credit applications you have submitted, sometimes known as ‘enquiries’ – including those for personal loans, credit cards and overdrafts, rental furniture, utility services, and even telecommunications companies – these enquiries are recorded even if you don’t end up approved or accepting an offer for credit
-The amount of money you have borrowed and;-Whether you make payments on time or not.
TIP #1
Each credit reporting body and associated credit score service may hold different information about you, and have different criteria on forming your score or rating. In Australia, these are the 3 major credit reporting bodies:
– Equifax
– Experion
– Illion
You should check your credit report and score with each of them, you can usually request a copy of your credit report for free once every 3 months.
What negatively impacts my credit score?
Your credit score can be impacted negatively if you don’t make your repayments on time, if you have a high credit card limit, make a lot of credit enquiries (where lenders pull your file for a credit check), you have changed address or employer, or filed for bankruptcy.
What positively affects your credit score?
Some of these items can improve your score over time, such as being at your address or employer for a longer period of time, limiting the number of credit applications you make, making your repayments on time, and managing your debt to avoid bankruptcy.
TIP #2
An easy way to build your credit score over time to present a better application to a lender is to make your repayments on time with your current credit providers, including utilities, phone bills, rent, loan and credit card payments. If you have an unexpected bill or emergency, or maybe you’re just in a tough spot, don’t hesitate to reach out to your credit providers to discuss what your options might be – not only could this protect your credit report and credit score from negative action, you might feel a little bit of relief knowing that you have taken the necessary steps to get back on track.
What is the credit score used for?
Lenders can use credit scores to aid in the decision making process of approving applications for credit. A higher credit score may allow the lender to offer you a financial product with a lower interest rate, or better terms. A bad credit score might indicate to the lender that you might be a risky candidate, so they may limit the financial products available to you, or they may not have a good interest rate, or require security or a guarantor.
TIP #3
As an individual you can use your credit score to gauge what you need to work on to meet your financial goals. Your full credit report contains your repayment history for any credit product you have held in the last 2 years, and details of defaults of unpaid accounts – this can help to identify debts that require attention.
Why would I want to improve or build my credit score?
If you have been declined for a loan, or another type of credit, or are interested in applying for a loan, having a good credit score or credit rating can put you in a better position with the lender, and in some cases they are able to offer you better interest rates or terms based on being a lower risk client. If you have a lower credit score, that doesn’t always mean that finance won’t be accessible to you, it just might be at a higher interest rate or come with additional terms, which is the way the lender mitigates the risk.
TIP #4
A quick way to improve your credit report and credit score is to attend to any errors on your credit report. Once you have accessed your credit report with each reporting body, check them over thoroughly to ensure that the information they have recorded about you is correct.
This includes for your personal details such as your address and spelling of your name to prevent fraud or mistaken credit listings, and also for your credit listings where you might notice a duplicate, an undue default or an enquiry from a lender you don’t recognise. Each credit reporting body will have their own guide on who to contact to correct errors on your credit report.
What if I need finance now but I have a poor credit score?
The good news is that not all lenders use a credit score to determine creditworthiness. There are many other factors which are considered when it comes to approving applications for credit, and the type of credit you are applying for can also play a factor in how heavily your credit score weighs on your application. Take the time to do your research before applying with a lot of lenders, as that may harm your credit score further by driving up the number of enquiries.
Tip #5
If you are in need of a loan from $300-$2000 and you are worried about your credit score, consider a FUNDO loan. We assess all types of applications, from those with amazing to not so great credit histories, and we are able to offer a fair go to more Australian’s by taking into consideration your current situation and positive behaviours, such as keeping funds available in your account and maintaining all your direct debits.
At FUNDO we understand that a small mistake made a while ago is not an accurate indication of your situation today. If you’re concerned about your loan application affecting your credit score, check out Fundo’s No Check Loans and start your journey with your Fundo Credit Score.
FAQS
Am I eligible for a Fundo loan?
We want to help as many Australians as possible!
Fundo is a responsible lender – as such, you must meet certain qualifications in order to be eligible for one of our great products!
You must:
– Be over 18
– Earn at least $300/week in regular income, excluding government benefits
– Demonstrate an ability to meet repayment deadlines
– Not place undue financial pressure on yourself by borrowing from Fundo.
We look forward to assessing your application!
How do I apply?
Our application process is all online and incredibly quick.
Fill out all your details on the application form and one of your friendly Fundo team members will assess your application.
Best of all, applications submitted during business hours will be processed on the same day.
Don’t hesitate, apply now, and get your decision in minutes.
Fundo is a responsible lender – as such, you must meet certain qualifications in order to be eligible for one of our great products!
You will have to complete a new application for each loan so we can assess your current circumstances. If you are an existing customer, take advantage of our 3-click-apply via your dashboard!
What if I miss a payment?
Users who miss their payment dates are subject to late payment fees and other relevant charges per your loan contract.
Fundo understands that unforeseen circumstances may affect your ability to repay your loan.
Speak to one of your friendly consultants to see what options may be available to you, or if you are expecting a change in your circumstances, check your dashboard for information about rescheduling a payment to avoid an unpaid payment fee with your bank.
In most cases we will need 48 hours notice to change payment dates on your loan account, but we’ll do our best to be there for you and work with you whenever you get in touch.
Disclaimer: The opinions expressed in the Blog are for general informational and entertainment purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific investment product. It is only intended to provide education about the financial industry. The views reflected in the commentary are subject to change at any time without notice.