1. Finance Tips
  2.  → Understanding credit files and credit ratings

Understanding credit files and credit ratings

Mar 27, 2019 | Finance Tips

Did you know that lenders and service providers have access to your Credit File and Credit Score.

If you’ve had difficulty in the past securing that car loan – then it’s essential that you understand your credit report and how to keep it healthy. That starts with knowing what makes up your Credit File and what determines your Credit Score.

Credit Files are held by Credit Reporting Agencies who collect, hold and distribute information from credit and service providers about YOU. And even if you have never applied for a loan, if you are under contract for a mobile phone or have utilities such as electricity in your name – then you will have a Credit File.

Information about your payment/repayment and default history is continually updated and accessible by lenders and service providers you approach for finance or credit.

And each time you apply for an account or a loan, an ‘Enquiry’ is made about your credit history and whether approved or not, the Enquiry is included in your Credit File.

Your Credit Score on the other hand, is a score out of 1000 or 1200 (depending upon which service you use to obtain your report) which is drawn from your Credit File to provide a snapshot of your ability to repay debt and manage loans.

Lenders and service providers have access to your Credit Score and your Credit File, both of which allow them to make responsible lending and credit provision decisions.

 

Credit Rating score categories – where do you sit?

 

Get your credit report

You can access your Credit Report once a year for free and it’s the first step to ensuring you build and maintain a healthy credit history.


The information contained in this blog is accurate only at the date of publication. 

Article by:

Share this article

Related articles

Finance Tips

How paying back a loan can improve a bad credit rating

Looking for ways to improve a bad credit rating? One solution is actually to pay back a loan. Take a look at why this is a helpful way to improve a bad credit rating. If you have a bad credit rating/score, it could be because you owed someone...

How to budget
Finance Tips

How to be a budgeting ninja

Wondering how to budget so you can track your spending and save money? Follow our tips to get started and our secret hacks to become a budgeting ninja. The very first step to having financial security and savings to fall back on is having a...

Finance Tips

Tips for Buying a Second Hand Car

So you’ve decided to go looking for a second-hand car. For some, this is an exciting time, while for others it can be daunting. The good news is, if you do your homework, not only should you not get stuck with a lemon, but you could even find...