We’ve all heard the words “Credit Score” at some point in our lives, and most have us understand enough to know its a number that people use to determine whether or not we can be given credit (loans, hire purchase, etc). But What is it really?
Well in New Zealand, a credit score is a number between 0 and 1000 and it basically sums up your entire credit history. Loans and other lines of credit you’ve had in the past, how quickly and regularly you’ve paid them off, and whether or not you’ve been late on payments are all key parts of determining your score. Think of your credit score like a game. Having credit is the game, and paying it back raises your score.
Just like in games, having a “high” credit score is a good thing, so anything over 500 is considered a “good” score. If you have a high score then you’ll be able to get better offers from banks, telcos, insurance companies, and utility companies. But, if you’ve got a low score, anything below 500, companies can be reluctant to lend to you, or even charge you higher interest rates.
If you’ve never applied for credit (credit card, hire purchase, loans etc) you probably won’t have a credit score. So, anyone under 18 probably won’t have a credit score, as they’re very unlikely to have credit cards or utilities in their name.
You’re probably wondering now how to find out what your credit score is. Well it’s actually free and very easy. You can go to creditsimple.co.nz and get it instantly, or you can request it from any of the three New Zealand Agencies: illion, Veda and Centrix. You won’t have to pay at any of those places, though you might have to wait a few days. Sites quote “anywhere between 60 seconds and 20 days” for it to arrive.
Understanding all of this information can be tough, and sometimes it can feel like just another thing to be stressed about. But there are ways you can improve your credit score, and find out why if your credit score is low. Our financial mentors can help you with anything you need to help you understand and improve your credit score, from simple advice to connecting you with relevant agencies.
Phone: 0800 345 123
Live chat: www.moneytalks.co.nz
We are available to help Monday to Friday 8am to 8pm, and on Saturdays 10am to 2pm. We are here to help you.