FAQ Archives - Credit Simple NZ

How to fix your credit score in 5 easy steps

Credit Simple — Thu, 05 Dec 2019 12:48:16 +0000

New Zealand banks don’t just include negative incidents on their reports to the credit bureaus, but they also include positive ones. That means there are ways to fix your credit score even after a few late payments or even a default knocks you back.

Here are the steps you’ll need to take to fix your credit rating and get it pointing in the right direction.

1. Know thy credit score

It’s hard to get from point A to point B if you don’t know where you currently stand. CreditSimple gives you your credit score – courtesy of credit bureau illion – in the form of a dial that shows you how far away you are from a perfect credit rating.

You can also see your credit report, which contains the actual loan records that illion uses to calculate your credit score. That means you can see exactly what’s helping it and exactly what’s hurting it.

There are other credit bureaus in New Zealand and you can request your credit score and credit report from any one of them.

2. Dispute any reporting errors

If your credit report shows you defaulted on a payment to your utility company but you know you never did, you can take it up with the credit bureau or the lender that reported it. Same with other lenders.

They’ll investigate the matter and remove the negative incident if they find there’s been an error.

Credit Simple conveniently lets you raise a dispute right through the website.

3. Fix your own mistakes

Look through your credit report and see if there are any late payments you may have forgotten about.

If a late payment of $150 or more is more than 60 days overdue, your lender can report it as a default. This will stay on your record for five years, so you can see how important it is to nip late payments in the bud.

4. Pay your bills on time

Now that you’ve cleared up any errors and took steps to minimise further damage, it’s time to start building your credit score back up. The good news is that New Zealand’s credit reporting scheme rewards you for doing the bare minimum of paying your bills on time!

The easiest way to do this is to set up direct debit. This will allow your payments go through automatically while you sit back and watch your credit rating start to tick back upward.

5. Stay credit active

Lenders want to see that you’re a responsible borrower and the only way to prove that is to have a healthy amount of debt (and of course, to make your payments on time). Certain loans, like home loans, will often boost your score just because you have it.

Others, like quick cash loans or certain credit cards, will lower your score temporarily. However, if you pay them on time they can serve as a good stepping stone toward the more desirable loans and your score may eventually rise even higher than before.

Fixing your credit score is easier than ever

Unless you have a perfect credit rating, there’s always room to improve. And with positive credit reporting in New Zealand, fixing your credit score is pretty straightforward. There’s no better time to get started than now – the future you will thank you.

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 How to fix your credit score in 5 easy steps appeared first on Credit Simple NZ.

Knowing what affects your credit score will give you the power to improve it

Credit Simple — Tue, 03 Dec 2019 15:18:47 +0000

In the old days, only negative borrowing patterns – think late payments and defaults – could affect your credit score, also known as your credit rating.

However, in 2012, New Zealand implemented a scheme called Comprehensive Credit Reporting (CCR). That means positive borrowing patterns – like making your payments on time – can help your score tick back upward.

The positive and negative factors that affect your credit score

Before we jump into the nitty gritty, this infographic should give you a good idea of which behaviours to avoid and which behaviours to favour:

Negative behaviours that affect your score

Even with the CCR, negative borrowing behaviours still have an impact on whether or not lenders give you money. Negative examples include:

Bankruptcies. These stay on your credit rating for two years after the bankruptcy ends or five years from the date you became bankrupt.
Defaults. Debts worth $150 or more that are at least 60 days overdue may be reported to a credit reporting agency and stay on your file for five years.
Late payments. Forgot to pay a bill? It shows up on your credit rating even if you settle the debt before it becomes a default.
Writs, summons and court judgements. Any court appearances relating to debt and the resulting decision negatively affect your credit rating.
Too many credit enquiries. If you apply for credit multiple times in a short space of time, it suggests you’re desperate for cash.
Bad Debt. The bureaus consider certain types of loans to be indications of bad borrowing behaviour, for example quick cash loans. Even having credit cards can bring down your score.

Positive behaviours that affect your score

It’s not all bad news. Some credit information can help improve your credit score, such as:

Repayment history. An established trend of punctual payments is a boon for your credit rating.
Account opening and closing dates. Lenders can see where, when and how often you’ve been extended credit in the past.
Type of credit facility. Whether it’s mobile phone bills, utilities contracts or other types of account, organisations can better understand your financial situation if they have more info.
Your credit limits. Again, any information on your current creditworthiness among other lenders is useful for accessing credit from other organisations.
Good Debt. Some types of loans will bring your score up. Home loans, student loans and business loans are all examples of loans that make you look like a responsible borrower.

How is your credit score calculated?

There are three major credit bureaus in Australia and each of them calculate their scores differently. Just look at the scales each bureau uses differ:

illion: 0-1000
Centrix: 0-1000
Equifax: 0-1200

Each of these bureaus have developed their own algorithms that take the positive and negative behaviours described in the previous sections, weight those behaviours according to the importance the bureaus place on them and calculate your score accordingly.

Although the bureaus don’t publish these formulas publicly, you can be sure they all largely consider the same positive and negative behaviours discussed.

You can also dispute entries on your credit file if you think there’s an error. You can read more about how to dispute records on your credit file in our guide to disputes here.

Credit Simple offers free, convenient access to your illion credit score. So feel free to have a dig around your file and get a feel for what types of activity the bureaus consider when calculating your score.

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What is a good credit score in New Zealand?

Credit Simple — Thu, 28 Nov 2019 15:00:59 +0000

What is a good credit score in New Zealand?

Your credit score, which is sometimes referred to as your credit rating, can range from 0 to either 1,000 or 1,200 depending on the credit bureau calculating it. In all cases, the higher the score, the better.

To make it easier to visualise, we’ve provided the table below to help you understand what constitutes a good credit rating in New Zealand – bureau by bureau.

If you want to see how your score stacks up to the scores below, simply sign up or login to Credit Simple to see your illion credit score for free forever!

Here’s a breakdown of credit score ranges from the three major credit bureaus in New Zealand:

Credit Score Range	illion score via Credit Simple	Equifax	Centrix
Excellent	800 – 1000	833 – 1200	846 – 1000
Very good	700 – 799	726 – 832	769 – 845
Average	500 – 699	622 – 725	650 – 768
Fair	300 – 499	510 – 621	495 – 649
Low	0 – 299	0 – 509	0 – 494

Using illion as an example, here’s what appearing in each credit score range (as well as getting a perfect score) could mean for you and your finances.

Credit score 1,000 (perfect score)

If you scored 1,000, you’re in a very exclusive club.

You’re likely in an older age bracket and have spent a lifetime building positive credit actions, such as prompt payments, sensible applications and limiting your lines of credit.

You’ll have good bargaining power when it comes to taking out a loan, and shouldn’t have any trouble landing lower rates and better terms than your peers.

800 – 999 (excellent)

For all intents and purposes, a personal credit score above 800 might as well be a perfect score since it represents a strong credit history built up over time.

Lenders should be eager to offer you credit as long as it’s within your ability to pay off, with attractive rates and terms.

700 – 799 (very good)

With a personal credit rating in this range, you should have no problem getting a loan as long as you have the ability to pay it off. You might not get the same great rates as someone with an excellent score but you shouldn’t do too badly either.

In many cases, all you have to do to improve your rating is to limit the number of credit applications you make, because making too many can bring your score down.

500 – 699 (average)

An average score is actually a fairly healthy score and in most cases means you haven’t experienced any major credit mishaps, like defaults or bankruptcies.

Avoiding late payments and limiting the number of credit applications you make are two great ways to bring up your score.

300 and 499 (fair)

This credit score range is below average, but you probably don’t have any extremely negative problems with your report, such as a bankruptcy.

In fact, you may just be in a younger age bracket, which lenders classify as riskier. Tighten up slightly on your credit behaviour and you should see improvements before too long.

0 – 299 (low)

If you’re here you probably have payment defaults or other negative data on your file. If that’s not the case, then it could be because you consistently pay your bills late.

In any event, this is considered the riskiest group to lend to so you’re better off trying to improve things sooner rather than later.

Paying your bills on time will actually improve your personal credit score, so automate your credit card and other loan payments. Avoid making multiple credit enquiries and wait for any defaults to be cleared from your record, a process that can take up to five years. t scores. Here’s how to tell if your score’s worth celebrating or if you need to work on it a bit more.

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How does my credit score affect mortgages and other loans?

Credit Simple — Sat, 13 Oct 2018 22:26:16 +0000

The majority of purchases we make in our lifetime are affordable enough for us to either buy outright or save towards over time. This is rarely the case for high-value assets such as houses, cars and other expensive items.

New Zealand’s residential property prices in April 2018 jumped 7.6 per cent over the past year to $678,856. Buying a vehicle is cheaper but still a considerable expense nonetheless. Even renting an apartment comes with significant upfront costs, such as agency fees, bonds and any monthly rent paid in advance.

Regions continue to see higher value growth than main centres...https://t.co/umWy1M1aA5 #NZrealestate #NZproperty #RealEstateNZ #firsthomebuyers pic.twitter.com/7TSU1Ftz4G
— QV.co.nz (@qv) May 8, 2018

So, unless you want to spend the next few decades saving for your first home or car, you’ll likely need access to credit to get the ball rolling.

What kind of credit score do I need?

It goes without saying that your credit score must be in better shape for a home loan approval than it does for a new credit card or mobile phone contract. However, there’s no one-size-fits-all answer for what credit score you need to gain approval. That will depend on various factors, including your credit rating, your recent activity, the financial institution’s internal assessments and whether or not you’re applying to a traditional lender.

https://t.co/Hhn7QSoFdM
— Credit Simple NZ (@creditsimplenz) April 19, 2018

What is considered to be a good credit rating?

We may not be able to give you an exact figure for the kind of credit score you’ll need to buy a home, rent an apartment or purchase a car. But we can give you a rough estimate of how lenders may view your current rating.

0-299: Unfortunately, you have a low credit rating and will struggle to obtain credit, especially for home loans and similar forms of borrowing. Got a score of zero? Click here to find out more about why.

300-499: We call this the ‘room to improve’ category. While not in the upper echelons, you probably don’t have any huge black marks on your report, but mortgage lenders may still view you as a risk.

500-699: This is an average rating, so your likelihood of securing a mortgage or personal loan may rely on individual factors and the lender’s specific criteria.

700+: You have a good to great credit rating and financial institutions will view you favourably when applying for mortgages and personal loans. (You might even be a ‘credit unicorn’ with a score over 900, like 9.2% of Kiwis.)

We hope this has helped you understand how your credit rating relates to big-ticket purchases such as homes and cars. Want to learn more? Just click here for our FAQ and ‘Learn’ section.

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Where can I get my credit report?

Credit Simple — Fri, 28 Sep 2018 23:21:07 +0000

Keeping tabs on your credit score could be crucial if you have hopes of funding some of life’s biggest purchases, such as a house or car.

But what about your credit report? If you’re not sure of the difference, don’t fret, as we’re about to give you a crash course on credit scores and credit reports, including how you can get your hands on them both (for free).

Your report contains all the information that lenders have regarding your past credit behaviour.

Aren’t credit reports and credit scores the same?

No. Your credit score is a number that summarises your creditworthiness to lenders. This score – also known as a credit rating – provides you with a quick and easy way of judging whether or not you’ll be offered the best deals on loans and other forms of credit.

Credit reports are a different kettle of fish. They provide a comprehensive overview of your entire credit history. If you want to know all the ins and outs of your past activity you’ll need to access your credit report.

How do I get hold of my credit report?

You can obtain your credit score for free simply by clicking here and following the instructions. At Credit Simple, it’s easy, instant and free. You’ll receive your rating, as well as an analysis of how your creditworthiness compares to other people in your area, age group and even star sign. Cool eh?

For your credit report (which should also be free), you’ll need to get in touch with one of the credit reporting agencies in New Zealand: Equifax, Centrix or illion. You can also access most of your key credit information through the ‘credit history’ tab on your Credit Simple dashboard.

Unlike your credit score, which is almost instantaneous, there’s a chance you’ll have to wait for a few days before your report arrives. But it’s often worth the wait if you want the nitty gritty details of your credit history.

Some credit reporting agencies may charge fees if you want your copy quickly, but it’s always free for you at Credit Simple.

Are you adulting correctly? @penelopewhitson checks her credit report in the name of being grown up & responsible. https://t.co/aspb38Gdlh
— Credit Simple NZ (@creditsimplenz) September 30, 2016

What information is in my credit report?

Your report contains all the information that lenders have regarding your past credit behaviour, including:

Personal details
Credit applications
Default data
Bankruptcies
Company directorships
Repayment history
Court judgments and other public information.

Each credit reporting agency has different processes for sending you a copy of your report, but you’ll always need to provide proof of identification and confirm a number of personal details before the document can be released.

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How do I know if I have a bad credit score?

Credit Simple — Sat, 22 Sep 2018 23:26:12 +0000

Is 600 a bad credit rating? How about 500? Or 400? Without context, calculating your creditworthiness based on your score alone can be difficult. Fortunately, we’re here to help you better understand your credit rating, particularly if you suspect you have a bad score.

The good, the bad and the ugly

Your credit score at Credit Simple ranges from 0 to 1,000 – and the closer you get to zero, the uglier your rating looks to lenders.

But at which point does your score sink from good to bad? Here’s a quick rundown of our scale from first to worst:

700 and above: Be proud. You’ve got a good or great score.
300 to 699: Depending on your exact rating, you range from slightly below average to average.
1 to 299: We can’t deny it. You have a bad credit score.
Zero: Oof. Your credit rating is in a state of emergency. Click here to find out more about zero scores.

Why do I have a bad credit score?

If you’re at the lower end of the scale, you’re probably wondering what you’ve done to get a bad score and how long it will take to fix it. You may need to request your credit report for a full breakdown of your financial situation, but bad scores are usually due to:

Late and missed payments
Credit defaults
Bankruptcies
Writs, summons and court judgements
Multiple credit enquiries in a short space of time
Debt agreements.

You’ll have to wait five years to survive some of the more serious black marks on your record though, such as defaults, bankruptcies, writs, summons and court judgements.

Can I still access credit with a bad score?

On a good day, a bad credit score means you’ll struggle to get the best deals, but you also risk your applications being rejected entirely.

https://t.co/dxPEPxkhtJ
— Canstar NZ (@CanstarNZ) April 11, 2018

Some lenders specialise in mortgages and loans for people who have a less-than-stellar credit rating, although you’re likely to face much higher interest rates. Credit cards are particularly difficult to obtain with a bad credit rating, and every rejected application could bring down your score further. And that’s why you may want to spend some time building up good credit karma to balance out any black marks on your file before attempting to borrow.

The post How do I know if I have a bad credit score? appeared first on Credit Simple NZ.

Credit scores 101: How to check your credit score (and more)

Credit Simple — Sat, 08 Sep 2018 23:26:19 +0000

You may not have put much thought into your credit rating before, especially if you’ve avoided credit cards, mortgages and other loans in the past. But there will likely come a day when you want financial help from lenders, so here’s our quick guide of everything you need to know about credit scores.

Any score over 500 is good, so your rating may not be as bad as you think.

What is a credit score?

Organisations use credit ratings to assess your reliability at paying back debts. A dazzling score gives you access to the best offers, while a dismal one could thwart your chances of getting credit for life-changing purchases, such as a home.

Credit scores typically range from zero to 1,000 in New Zealand, and the lower your score, the less creditworthy you’ll appear to lenders. A bad credit rating means you may get rejected for loans or face higher interest rates on any borrowing you are approved for.

Are you hoping to secure a mortgage on your dream home? A good credit score can save you from the disappointment of rejection.

How can I check my credit score?

Checking your credit score is easy, instant and free – and you can do the whole thing online right here at Credit Simple. We can provide you with your rating, as well as your credit information and a breakdown of how your score compares to people of the same age, gender and location (and even by star sign).

You can access insights into what your credit rating actually means, while also enjoying the pick of the best deals, tailored to your score. Don’t have time to regularly check your credit file? We can send email alerts informing you of any important changes.

My score is terrible … what can I do?

Any score over 500 is good, so your rating may not be as bad as you think. But if you’ve slipped below this level, you’ll want to take remedial action to improve your chances of accessing credit.

Avoid making late payments on bills, credit cards and loans. Late payments can turn into credit defaults, which will stay on your file for five years and are a big red flag for lenders.

It’s not ideal to avoid credit entirely though. A lack of a credit history means lenders have nothing to base their decisions on when weighing up whether or not to approve your application.

Is a credit score the same as a credit report?

Nope. Your score is a single number that indicates your general creditworthiness, while a report provides a comprehensive overview of your credit history. Reports include information on your bill payments, defaults and existing borrowing. You can access your credit score easily online, and request your report from a credit reporting agency.

The post Credit scores 101: How to check your credit score (and more) appeared first on Credit Simple NZ.

What is a default on credit? (And how can I remove it?!)

Credit Simple — Thu, 23 Aug 2018 23:26:22 +0000

Have you spotted a default on your credit rating? If so, your credit score could have taken a big hit.

Let’s take a look at what credit defaults are, how long they stay on your report and the measures you can take to clear defaults from your credit history.

You can only get a default actively removed from your history when a mistake has been made.

Understanding defaults on your credit rating

A default on credit will occur if you fail to pay an expected debt, such as a utility charge, mobile phone bill, credit card repayment or loan.

But missed or late payments don’t always turn into defaults. You have to be at least 30 days overdue on a payment of $100 or more – and the credit provider must have taken steps to recover the money (more here).

If your debts remain unpaid, the provider is likely to get in touch with a credit rating agency to report the default, which will then show up on your credit file.

How long does a default stay on your credit rating?

A credit score default will stay on your report for five years and can have a significant effect on your ability to access mortgages, credit cards, loans and other forms of borrowing.

Even if lenders look past your credit score, you may not get the best deals and would be likely to face increased interest rates. Bad times.

What’s worse, defaults stay on your report for five years even if you pay off the original debt. That doesn’t mean you should skip paying it though; any debts you clear will also be recorded in your credit report, so lenders will know you’re making an effort.

You may get the thumbs down from lenders if you have a credit default in your history.

Can I remove a default from my credit report?

You can only get a default actively removed from your history when a mistake has been made. These can be quite common, so it’s important to check your credit score regularly to ensure no black marks have crept into your file.

If you believe an error has occurred, your first port of call will usually be the credit provider. They may take some time to rectify the problem, but be patient. You can also contact a credit reporting agency directly with evidence that a default is false. There are three agencies in New Zealand: illion, Centrix, and Equifax.

Sadly, if the default is legitimate, you’ll have to wait until five years have passed. In the meantime, begin building up some positive credit history for the big day when the default is scrubbed from your record.

The post What is a default on credit? (And how can I remove it?!) appeared first on Credit Simple NZ.

Help! Nothing has changed on my credit file, but my score has changed. Why?

Credit Simple — Sun, 05 Aug 2018 19:57:06 +0000

So your credit score has changed, but you can’t see anything immediately obvious on your credit history to indicate why it’s different?

There are a few reasons why your credit score can change, even though it doesn’t look like anything has changed on your credit history. Some of the reasons why your credit score may change are:

Data is only held on your credit file for a certain amount of time, something that is decided by privacy laws. A default from 10 years ago (for example) won’t affect your credit rating today. Information can drop off your credit file as it gets older, which can change your credit score.
How old your credit information is can also have an effect on your score – for example, a recent loan enquiry is more relevant than one you made four years ago.
Credit providers sending monthly payment data to a credit bureau can also affect your score, as changes in the payment status of your account(s) happen. Even if you’ve been paying on time, the length of time you’ve been up to date could have an influence on your score. If you have specific questions about your credit file, you can email creditsimplesupport@illion.co.nz or call us on 0800 005 088.

The post Help! Nothing has changed on my credit file, but my score has changed. Why? appeared first on Credit Simple NZ.

Is Credit Simple legitimate and reliable? Our response to questions on Reddit, Geekzone and elsewhere online

Credit Simple — Sun, 01 Jul 2018 23:31:01 +0000

Welcome to Credit Simple. If you’re reading this blog, chances are you’ve found your way here after asking a search engine if our business is legitimate (such as here on Geekzone and here on Reddit). So we thought we’d give you the low-down on myths and truths about our business, credit scores, and your rights and privacy.

Pffffft. Everyone uses Veda! Nobody uses Credit Simple.

There are three credit reporting agencies in New Zealand: illion (Credit Simple’s parent company), Equifax (formerly Veda), and Centrix. Each company holds slightly different sets of information. Credit scores are calculated using sophisticated statistical models, and are based on information that is held by the credit reporting agency. Different credit reporting agencies may hold information from different credit providers, and each agency will have developed its own scoring models. Your score from each agency won’t necessarily be the same. Our parent company illion holds a significant amount of unique data that other credit reporters don’t hold (and therefore use in their credit scores), including telco and utility account and payment information. When a company does a credit check on you, they may use one, two, or all of the companies to do so. We recommend that even if you get your score through Credit Simple, you should still check your credit file with each company (you can do this free, but you may have to pay if you want instant results).

I think your business is a scam and you’re ‘phishing’, or conducting identity theft

None of the above. Credit Simple is owned by illion, a data analytics company, and we adhere to all relevant legislation. Credit Simple is not a scam and never engages in ‘phishing’. As a credit score business, we take your privacy extremely seriously and we’re also big on consumer rights. Our parent company is a credit reporting agency, and credit reporting is an area that’s tightly regulated, and the industry has to toe the line at all times. Your information is kept secure and we don’t sell your information to anyone. Only you can see your credit report and if a credit provider wants to check your credit, they have to advise you that they intend to do so, and you need to agree to the credit provider doing so. We have more information about rights and privacy on our blog here and you can read our privacy policy here.

I can’t believe you’re using my star sign to calculate my credit score!

That’s a common myth. Your star sign isn’t used to calculate your credit score at all. When you’re in the Credit Simple dashboard, you’ll see stats about how you compare by age, gender, star sign and so on. This is simply a comparison tool for your interest – a novel way of looking at how you measure up to other people like you.

If I check my credit score with you, will it lower my score every time I look?

Not at all. You can check your own score as often as you like and it will never affect your score. A credit provider checking your credit file is called an ‘enquiry’ but if you check your credit, it’s called an ‘access’ and that doesn’t affect it. However, if you apply for lots of credit with a credit provider (e.g. a credit card or loan) within a short space of time, your credit score can go down for a while, as it makes you look ‘desperate for credit’ to credit providers. It’s best to shop around for credit first and figure out what suits you best before applying for anything.

The credit score you gave me is different to the one I got from another service

Yep, that can happen. In fact, it’s highly unlikely that you’ll have the exact same credit score from any two providers. Each credit reporting agency has its own way of calculating credit scores, and each company also has a slightly different set of data. To add to that, our credit score range is 0-1,000, whereas other companies have ranges that run higher than 1,000. In an ideal world, consumers would be able to see a credit score that pulls on all possible/available credit scores, but as yet, this service doesn’t exist.

I own a mortgage-free property and have cash in the bank, but my score is really low

Credit scores are calculated based on credit you’ve accessed, rather than assets you own, so your mortgage-free house or your savings account aren’t put into the calculation. Credit reporting agencies simply don’t have access to information about your assets. While this information would be beneficial when applying for credit, it’s not information held by a credit reporting agency.

Has the credit reporting system changed?

Credit reporting has recently changed from a ‘negative’ system (where you got penalised if you did something naughty, but otherwise were treated much like the next person) to a ‘comprehensive’ system (where your ‘positive’ payment information is now being put into your credit score calculation). We know from our analysis that on average, a Credit Simple user with positive information on their file will have a score that’s around 100 points higher than one without positive information.

Someone else’s information is on my credit file!

In a very small number of cases, there can be mistakes on your credit file. We’ve built in a way for people to question something if they think it’s incorrect (you can see this within the dashboard – look for the button that says ‘question this’). To date we’ve had less than 1% of Credit Simple users query something. If you need help getting something sorted out, email us on creditsimplesupport@illion.co.nz or call us on 0800 005 088.

Still got questions? Have a look at our Learn section on the website and check out our blog. Talk to us. Email us on creditsimplesupport@illion.co.nz or call us on 0800 005 088.

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