Your credit history can affect you even after 5 to 7 years. You may not be aware of the impact your default payments may create in the future. We created this simple blog with all the basics you need to know about your credit score, report, and credit defaults.
Credit History Basics
1. What is Credit Score and Report?
- A credit score is a calculation of your credit loans, time period and repayments of such loans in the past. This score can be from 0 to 1200
- A credit report contains important information about yourself (like your address and other basic details) as well as your actual credit history. This is important for your future loan providers
2. Credit Defaults
- You may have delayed paying your utility bills a few years ago. Consequently, this default goes into your credit report and score while staying there for five years
- If you have not made payments even after you have been notified by your lender, this default passes on to a debt collector and could remain in your credit history for up to 7 years. Therefore, it is important to ensure that you pay your debts on time
3. How Does This Affects Future Loans?
Your future home loan providers could reject your home loan application because of your defaults. This could affect your ability to successfully obtain home loans.
Furthermore, you can view your credit report free of cost, once a year.
4. What about an Incorrect Listing?
Incorrect listings can occur for a variety of reasons. You may not have been notified properly about your repayments or your payments may not have been processed in time. As a result, you may have an incorrect listing on your report. Here is what you can do to change an incorrect listing.
5. How Reliable is Credit Repair?
Credit repair companies promise to make all the negatives from your credit report go away. Since it is illegal for them to even advertise this, it is important for you to check all the important information. Furthermore, you could possibly fix your credit score by yourself.
For more information, look up ASIC’s credit report factsheet
Buying your first home or property can be stressful, especially when applying for a loan. This blog highlights the consequences of not making timely payments and having defaults. Being aware of this beforehand can make you more careful in the future.
Here are some other financial advice articles we thought you might appreciate :
- 5 Things You Need To Know About Claiming Tax Depreciation on Your Property
- 5 Short Term Leasing Tax Facts That Could Save You Money
- How To Choose the Right Landlord Insurance For You
- The Best Financial Advice You Need To Buy Your First Home
- How To Be Mortgage Free In Ten Years