Understanding your credit history: RateCity

New research from Veda has revealed that 80% of Australians have never checked their credit history, while 93% of Australians don't know how to do so, according to RateCity.

When signing up for a home loan, or other financial commitment, a credit history can often be the make or break factor and new changes mean that it's now crucial for you to keep this record clean.

Alex Parsons, RateCity's CEO, said that the updated credit reporting scheme has access to the date credit accounts have been opened and closed, the current limit on each account and the repayment history. It also allows consumers to take steps to remove flaws.

“In the past, a late payment on a phone bill or loan could put a ‘black mark’ on a consumer’s record for years to come,” said Parsons.

“But with the new ‘positive’ changes to credit reporting, consumers will have a chance to redeem themselves and effectively add ‘green ticks’ to their file as they do so."

New changes to credit reporting, coming into effect on March 12 this year, will have additional data backdated to December 2012.

“That means staying on top of all your bills and paying on time, which is the only way to ensure a problem-free credit history,” he said.

If you have a black mark on your credit from the past, and you're now working to rectify this, you stand to benefit most from the new reporting, he noted.

“That’s because banks will have more insight into their credit file. But this consumer will need to be diligent in making an effort to improve, because the banks will be watching.”

Those with good credit and who pay the bills on time, there shouldn't be an impact, and they may even see rates offered by the bank.

If you haven't got a black mark but you haven't always paid bills on time, you'll want to be aware that these issues do not show up in the future as late payments each month will now show up on file.

Credit tips:

·    Set up automatic direct debits from your transaction accounts to pay bills on or before the due date

·    Use electronic banking to your advantage

·    Reduce any unnecessarily large credit limits you may have

·    Get organised! Set reminders – It doesn’t matter whether you use an app on your phone or the traditional post-it on the calendar, whichever system works best for you will help keep you on top of your bills. It may even help to set the reminder a few days before, so, if you do forget, you still have time to make the payment.

Source: RateCity

jduke@propertyobserver.com.au

Jennifer Duke

Jennifer Duke

Jennifer Duke was a property writer at Property Observer

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