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You may not think your credit position is important, but as lots of other people do, it’s a good idea to take ownership of your credit situation. You should be aware of exactly what’s in your credit report and what you can do to make sure your credit score is as high as possible.
Clean credit reports make it easier for you to borrow money. You can enjoy better interest rates and your application can be approved faster, giving you access to the cash you need. Here's what you'll need to know to ensure you get the best credit report:
What information is held on file?
Your credit file will contain information about any default that you have made on payments against your name. A default is a payment that is 30 days overdue, where the lender has taken action to try and recover their money. A default can stay on your file for five years, even after the payment has been made.
Your credit file also contains details about the number of credit applications you’ve made and their frequency and amount. It may also tell anyone who looks how much your current borrowing totals, whether you have been making regular payments, and for how long.
How do you access your credit file?
You can request a credit report that outlines the information in your credit file at any time. There are three providers in New Zealand and you can request a report online, free of charge. You only have to pay if you require a quick turnaround (within five working days], so if you would like to check what it says in advance of applying for credit, it could pay to plan ahead.
The providers are: Veda [http://mycreditfile.co.nz/compare-our-products]; Dun and Bradstreet [ https://www.checkyourcredit.co.nz] and Centrix [http://www.centrix.co.nz/request-for-personal-information.html].
What should you do with your credit report?
If you request a credit report, the top priority is ensuring that all information held about you on file is accurate. Identity fraud is not uncommon, so it’s important to make sure that all the details held on file are true to your actual credit history. If you spot a mistake, you can get it corrected - you just need to contact the relevent credit agency.
If you discover that your credit rating is poor because of previous problems with payments or debts, don’t lose heart. It is possible to improve your credit position with consistent good behaviour such as making payments regularly and on time. Make sure you deal with any outstanding debts and then set in place a plan to ensure that you do not default again.
When you organise a car loan with Enterprise Motor Group, we’ll make sure we structure the repayments to fit your budget. But if you do ever realise you’re going to have a problem making a payment on time you should contact us straight away so we can discuss your options. It’s always a good idea to proactively stay in contact with your lender and make them aware of any issues that you are going to have with payments - this is an essential part of managing your credit position.
Why do I need a good credit report?
Having a poor credit report doesn’t mean you can’t borrow money, but it does make it more difficult to do so. Good credit performance can result in access to lower interest rates and a faster application turnaround time. It could also push you forward in the queue - for example, if you’re being checked by a landlord choosing between prospective tenants.
The team at Enterprise Motor Group will always try to get you the best loan for your situation. If you want to understand more about how your credit report could impact your car loan, or you would just like to talk about your options, give us a call today.
Who uses your credit report?
The businesses who request credit reports are usually either lenders, service providers, or employers. Anyone who offers you credit - banks, credit card companies, hire purchase companies - will not enter into a relationship with you without checking your credit report.
That’s also true of anyone who might have expectations about your ability to make payments regularly and on time. Think utility companies, landlords and mobile phone providers. And of course, your employer is probably keen to understand how good you are at handling money too, so chances are they might request a copy of your credit file before they invite you to sign on the dotted line.
The information held on your credit file is incredibly important in giving you access to the goods and services that you require. By keeping your credit report clean, you can make applying for credit faster, easier, and more cost-effective. You can be proactive in checking your own credit position and doing everything possible to maintain a clean record of credit. It might take a bit of time, but we think it could prove to be a worthwhile investment in your borrowing ability.
If you’re getting ready to go car shopping and would like to talk car loan options, give the team at Enterprise Motor Group a call. We’ve helped thousands of Kiwis get on the road by providing them with a car loan that works with their budget.
Please note, this article does not represent personal financial advice.