Eight things about your credit history that may surprise you
Borrowing can actually help your credit score, as unintuitive as that might sound. Potential credit providers want to see that you’ve got a history of responsibly paying your bills, so borrowing a small amount and paying in full and on time will help to boost your credit score.
Your credit file will also include publicly available information such as court judgements and bankruptcies. So anything out there online or in court databases about you will most likely also appear on your credit history.
Nobody can check your credit file without your consent, except government departments. And if they do, they’re meant to leave a note on the file to indicate they’ve accessed it.
Making lots of credit applications will damage your score. It makes you look desperate for credit, and that’s considered a bad thing by companies who might lend to you. The best thing to do is shop around for the deal you want, then apply only for that. However you can check your own credit score and credit history as many times as you want here on CreditSimple.co.nz and it’s always free and won’t damage your score.
A lot of people think they don’t have a credit history at all, because they’ve never had anything on hire purchase or used a credit card. But actually, your credit history includes a lot of other things such as power and phone accounts, mobile phone and internet, and personal loans.
It’s actually really hard to get a perfect credit score of 1,000 – you have to work up to it. Many people think they start off with a perfect score and they’ll only go down if they miss paying their bills, but it’s also about regularly and responsibly making payments. Even getting above 900 means you’re into credit unicorn territory – only 9.2% of Kiwis have a score above 900.
If you’ve got a good credit score, you should be asking for a better deal, because you’re the kind of customer companies want to deal with. Our research shows only 15% of Kiwis have used their credit score to get a better deal, but 60% would change their financial institution if they got a better rate. Go out there and ask for discounts and cheaper rates – and if you don’t get them, switch.
Defaulting on your bill payments will hurt you more than you realise. We often talk to people who are surprised they’ve got a credit score of zero when they haven’t had something seriously bad, such as a bankruptcy, happen. But not paying your bills – or paying them late – is one of the worst things you can do for your credit score.
