Your credit rating has a lot more influence over your financial life than you might realise. In Australia, mortgage providers and even some employers look at this score before they make a decision.
A strong rating can land you a lower home loan rate and generally smoother approvals for major purchases. But a low score can mean higher interest or outright refusal.
Ultimately, you get clear insight into where you stand and what steps to take next by regularly checking your credit rating. Do it once a year, or after a big change – new job, new address or a loan application – and you’ll stay ahead of surprises.
Why Your Credit Rating Matters
Your credit rating essentially shows how reliably you repay what you owe. Lenders use it to decide if you’ll make repayments in full and on time. Landlords are similar since they might ask you to provide it to figure out if you’ll pay rent without any delays. Even insurers sometimes use credit files to gauge risk.
So a strong rating can earn you competitive interest rates and flexible loan terms. A weaker rating, on the other hand, can lock you into higher costs or much longer applications.
You won’t fully understand your financial options without checking your file yourself. Knowing your rating lets you negotiate with lenders or explore alternative finance.
Gathering What You Need
Before you dive in, gather a few key documents. You’ll typically need a driver’s licence or passport plus proof of address – think a recent utility bill or bank statement. Some services also ask for your Tax File Number, though that’s optional.
Have your online accounts and passwords at hand, because you’ll create or log into a secure portal. Once your identity is confirmed, you can view or download your full credit report. If you spot something unfamiliar – like a loan you never took or an address you’ve never lived at – you can raise a dispute straight away.
Checking Through Credit Reporting Agencies
Australia has three major credit reporting agencies:
- Equifax
- Experian
- Illion
Equifax lets you view your file instantly when you sign up and you can pay a small fee to refresh it any time. Experian provides one free credit score plus the choice of a paid subscription for ongoing monitoring. Illion allows you to check your statement free once a year, and has paid plans for extra alerts.
Each interface here differs, but each report shows you details like your:
- Credit accounts
- Payment history
- Defaults
Interpreting Your Credit Report
Once you’ve got your file in front of you, take a moment to breathe and read through it. Start with your personal details – name, address, date of birth – to ensure they match exactly. Next, look at your credit accounts: home loans, car loans, etc. Check the balance and repayment history for each. If you spot a late payment that shouldn’t be there, make a note to dispute it.
You’ll also see public records like bankruptcies or court judgments; these can stay on your file for several years, so it pays to understand their impact. Finally, review any credit inquiries that have been lodged by lenders.
And remember that multiple hard inquiries in a short time can knock a few points off your score, so keep an eye on who’s checking your file.
Tips for Easy Maintenance and Improvement
Keep your credit card balances below 30% of the limit and always settle at least the minimum repayment by the due date. Also, swing in extra repayments on loans whenever you can – small amounts add up over time and show lenders you’re serious.
Another good way is to set up calendar reminders or direct debits so you never miss a payment. It can also help if you avoid closing old accounts; seasoned lines of credit boost the length-of-history component.
Lastly, when you shop around for new credit, do it within a tight time frame to limit the impact of multiple applications. This approach is how you can easily maintain your file while you build positive entries month after month. Over time, you’ll see your rating nudge upward.
Common Mistakes to Avoid
People often make two big errors when it comes to checking their credit. First, they ignore their file until a lender asks, which leaves little time to correct mistakes. Second, they think checking is a one-off task. Your financial life evolves – could be job changes or a new mortgage application, but either way, it can trigger fresh entries. Check at set intervals and after big changes.
Another slip is assuming all credit inquiries are the same. A soft check – like the one you make for a free score – won’t actually affect your rating. A hard check – when you apply for a loan or credit card – can shave points off if done too often. Keep notes on when you apply and who you asked, so you know exactly what’s been logged.
When to Seek Professional Help
If your file contains serious issues – like a default you can’t explain or a public record you believe is incorrect – it might be time to call in the experts. A financial counsellor can guide you through the dispute process.
You might also want to speak with a credit repair specialist, but be cautious – only work with those registered with ASIC (Australian Securities and Investments Commission). If you’re overwhelmed by dozens of entries, it helps if you just focus first on the ones with the biggest impact:
- Missed repayments
- Defaults
- Court judgments
Clearing just one of these gives your rating a decent boost and opens a few more doors to better finance options.
Tracking Changes Over Time
Your credit rating isn’t static. Interest rate fluctuations and new loan applications will both leave a mark. Make a note of your score throughout the year – could just be in a simple spreadsheet – and write down any changes in your circumstances. This helps you see any patterns.
If your score dips right after a new credit card application, you’ll know why. If it climbs after you clear a debt, that shows your efforts have paid off. Over a year, you’ll map out what actions help your credit score the most, which means you can double down on positive moves and avoid the missteps that drag you down.
Final Thoughts
Checking your credit rating isn’t a one-and-done job. Treat it as a regular check-up – once a year or after any life-changing event. This could be a new job or a relocation. Even just any big new purchase.
You’ll be able to spot errors or surprises early and fix them before they grow once you start checking your score. And remember to maintain your file with a few simple habits to keep your rating looking good:
- On-time payments
- Sensible balances
- Cautious credit shopping
You’ll get loads more options when it comes to interest rates and applications when you’ve got a healthy credit score.
How Our Finance Passport Can Help
Finished checking your credit rating and want to start your homeownership journey? Use Upscore’s Finance Passport for free and access personalised mortgage options and lender comparisons.
