bankruptcy Archives - Credit Simple NZ

Here’s what a credit report actually looks like

Credit Simple — Thu, 12 Dec 2019 09:45:56 +0000

If you’ve ever wondered what your credit report looks like, wonder no more. This guide will give you insight into your credit report, including what information it contains, how to read it, and why it’s so important.

There are three main credit reporting bureaus in Australia, and you can access their version of your report in a number of ways, including in a written/physical format or through an online dashboard.

Each variation may differ slightly in the way it’s presented, but the bulk of the information will be the similar. For this guide, we’ll be using the convenient (and free!) Credit Simple online credit report dashboard to explain what your credit report contains.

Credit Simple gets its data from the credit reporting bureau illion.

Your credit score

When you first login to Credit Simple, you will see your credit score. This is a reflection of your credit-worthiness boiled down from a heap of lending data into a simple number.

Your credit score and score trend

illion scores range from 0 – 1,000 and the higher the score, the more creditworthy you’re determined to be.

Here’s how the scores break down:

Score of 0. This is the lowest score you can get and means you’re the riskiest kind of borrower. People with a score of zero either don’t have a credit history at all or have experienced a very negative credit event like bankruptcy.
1-499. You have a below-average score and are considered very risky to lend to.
500-699. You have an average score and with a few small changes to your borrowing behaviour, you could easily improve your score.
700-799. You have a good score and lenders are likely to give you favourable treatment. However, you may want to limit the number of applications you make, as this is what is likely keeping you from having an excellent score.
800-1000. You have an excellent credit rating and are considered the least risky to lend to. This puts you in a great negotiating position with lenders.

Your credit history

Your credit score isn’t a magic number that is pulled out of thin air. It is the result of a calculation that incorporates heaps of data around your borrowing habits. The data that your credit score pulls from is called your credit history.

Credit Simple also provides your credit history, broken down into the following categories:

Personal information. Your name, date of birth, address and previous address.
Accounts. The accounts you have open including mortgages, credit cards, utility accounts and even equipment hire. It also includes details like the amount you owe and a complete breakdown of your payment history.
Enquiries. The times you’ve authorised a lender or a utility to do a hard enquiry into your credit history (a hard enquiry is an official inquiry related to an application for a loan). Looking at your own credit history (soft enquiry) won’t decrease your score, but too many hard enquiries can lead to a small deduction.
Authorised agent enquiries. The times you’ve allowed an authorised agent, such as a mortgage broker or a car dealer, to do a credit enquiry on your behalf.
Defaults. Any payments that are at least 60 days overdue (or were at least 60 days overdue at the time of payment).
Serious credit infringements. Situations where a lender believes you fraudulently tried to obtain credit or tried to fraudulently avoid your credit obligations.
Judgements and Summons. Publicly available court records pertaining to your debts.
Personal insolvency. Publicly available data from the Australian Financial Security Authority related to bankruptcy.
Other public record information. Other publicly available information that may be useful to potential creditors when determining your creditworthiness.
Company directorships. Publicly available information from the Australian Securities and Investment Commission about any previous or current directorships you’ve held in any company.
File notes. Notes placed on your credit history (at your request) explaining or disputing the circumstances surrounding information on your report.

Here’s what it looks like in the tool:

The categories of reporting in your credit report.

You can expand each section to see much more detail about each. Here we are looking at payment history of a specific account listed in the accounts section:

A detailed repayment history for an example account

What can you do with this information?

As you can see, a credit report is quite straightforward although it can contain quite a bit of information. The good thing about a tool like Credit Simple is that it allows you to have all of this information at your fingertips and dig through it systematically.

Going through your report with a fine-tooth comb can help you in a number of ways. You can:

Identify areas where you could improve. If you see that late payments are hurting your score more than you thought they were, it’s likely to propel you to make changes.
Identify errors in your report. If you see something reported that you dispute, you can bring this up with the lender or the credit bureau. Credit Simple lets you lodge a dispute right through the tool.
Negotiate better terms. If you see that you have a good score, you can have more confidence in negotiating with your lender for better terms like lower interest rates and reduced fees.

The information in this blog post is general in nature and does not constitute personal financial or professional advice. It is not intended to address the circumstances of any particular individual. We do not guarantee the accuracy and completeness of the information and you should not rely on it. Before making any decisions, it is important for you to consider your personal situation, make independent enquiries and seek appropriate tax, legal and other professional advice.

The post Here’s what a credit report actually looks like appeared first on Credit Simple NZ.

Bankruptcies have hit a five-year low (but here’s why it’s smart to stay vigilant)

Credit Simple — Sun, 04 Mar 2018 15:27:10 +0000

When it comes to managing our money, and staying out of financial trouble, Kiwis are beating the Aussies hands down, according to new analysis we’ve run, which shows that the number of people declaring bankruptcy has reached a five-year-low, dropping by 15% last year compared to 2016.

And if that isn’t enough cause for celebration, we have approximately half the number of bankruptcies, per capita, compared with our friends across the ditch.

CreditSimple.co.nz spokesperson Hazel Phillips said the five-year bankruptcy low is a positive sign for the New Zealand economy. However, with the change of government and housing prices continuing to rise, Kiwis need to continue making conscious budgeting decisions.

“Our economy has been steadily rising over the past few years, which helps create jobs, boost personal finances and bring bankruptcy levels down,” Ms Phillips said. “The outlook is still good, but there are a number of changes that people should bear in mind: this year we have a new government, new legislations being passed and it’s difficult to predict what will happen to our economy.

“It’s crucial that Kiwis continue to budget and ensure they have an emergency fund to fall back on if personal circumstances suddenly change.

“Having a cushion of money to draw on if you lose your job or enter a tough spot financially means not having to rely on high-interest sources of credit, which can sting you more in the long term.”

Aucklanders need to be particularly careful, with more than double the number of bankruptcies than anywhere else in the country, followed by Christchurch, Hamilton, Napier and Lower Hutt.

Ms Phillips said Kiwis need to be realistic about what they can afford when getting a loan or mortgage and create a repayment plan from day one.

“If you begin to struggle and ignore your bills, it can significantly damage your credit score and can often be the start of falling into bad financial habits.

“There are free budgeting services available in New Zealand that can put you back on track and help you get out of the debt cycle. Asking for advice and getting budgeting help can make all the difference.”

Kiwis can check if their credit health is in shape by getting their credit score for free at www.creditsimple.co.nz. You can read up on everything credit score-related with this comprehensive guide over at MoneyHub.

If you need financial advice, FinCap can put you in touch with free budget advice services wherever you are in New Zealand.

The post Bankruptcies have hit a five-year low (but here’s why it’s smart to stay vigilant) appeared first on Credit Simple NZ.

Debt-free retirement out of reach for many Kiwis

Credit Simple — Thu, 15 Jun 2017 01:02:30 +0000

Here at Credit Simple HQ, we’re always talking to Kiwis from all over the country about their credit scores and their finances. So when we noticed a trend – that is, older Kiwis telling us they don’t feel sorted for retirement – we thought we’d dig into the data to see if the numbers would tell us a story.

And that data shows that New Zealanders over 55 are buckling under debt pressure, with the age group making up an increasing percentage of bankruptcies. Over 55s now represent 27.8 per cent of bankruptcies, up from 20.6 per cent in 2010. (Yes, we’re shocked too!)

These figures indicate that financially secure retirement is slipping further out of reach for many Kiwis if debt is not well managed in younger years. The data shows 28 percent of mortgages are held by those aged 55 years and older, leaving them 10 years to pay off an average mortgage of $321,000 by age 65.

While some homeowners manage to achieve that, the data shows New Zealanders over 65s hold eight per cent of mortgages, with the average amount owed by this age group sitting at around $232,000. Those 55 and older in Auckland have the most mortgage debt, with the average mortgage sitting at $393,229, while over 55s with a mortgage in Dunedin have an average of $164,701 owing.

New Zealanders are heading into their twilight years with more than just mortgage debt too, with people over 65 responsible for four per cent of personal loans and 16 per cent of credit card debt. Average credit card limits peak in the mid-60s for both men and women, rising from an average limit of $1,756 for 18 year olds to $11,135 for 65s.

CreditSimple.co.nz spokesperson Hazel Phillips says Kiwis are hanging onto debt for longer and as a result paying more interest over their lifetimes.

“The interest rates you pay on all debt, not just mortgages, play a significant role in how long it takes to pay off debt. With interest rates tipped to rise, it’s more important than ever to use the power of your credit score to negotiate better interest deals.”

The good news is, you can check if your credit health is in shape by getting your credit score for free right here at Credit Simple.

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