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What is a credit score anyway?

Your credit score is what banks and lenders use as part of their determination of your risk- that is how likely it might be that you may not be able to make your repayments.

A site like getcreditscore.com.au can give you an example of your credit history.

The tricky bit is that you may be adding to your credit score without realising it and this may cause problems later when you want to get a home loan or refinance your current loan.

Many things can add to your credit score, including:

  • Taking a car for a test drive...who knew?

  • Accessing one of those 'what is the cheapest credit card' calculators

  • Filling out an enquiry form for an online lender

  • Making a purchase using an interest free offer

  • Buying a mobile phone on a plan

  • Applying for a personal loan

  • Being in arrears for bills like utilities or rates

In early December Julia Corderoy in writing for news.com.au explained that 'a credit score is rating of your creditworthiness' and 'your credit file records contain certain dealings with credit providers and contains a history of overdue debt, defaults and credit applications. You will have a credit file if you have applied for a credit card, loan or even a mobile phone within the past five years'.

A good rule is that if you are required to give out your personal data ie your drivers licence and/or birth date you may be adding to your credit score.

In many cases, you will have legitimate reasons for applying and this can be explained but that's where it does help to have a broker working on your behalf.

A broker can determine your suitability for loans with several lenders as well as the big banks without adding unnecessarily to your credit score.

At Diamond Finance Geelong we can offer you finance for your home, car, business equipment or commercial lending all in a safe environment.

Come and see us anytime.

Check out the original article here