A Credit Report is a report that credit providers rely on to assess your credit worthiness. Your credit report contains your credit score. This credit score is a single summary indicator of whether your credit worthiness – i.e., whether you would be a good or bad credit risk.
Knowing your credit score is important for managing your financial health and achieving long-term financial goals.
Your credit score is private. It is not a public record. When you apply for debt, rentals, jobs and insurance policies, you are often authorising the institution you apply through to access your credit score.
This blog will cover to following topics:
- Why your credit score is important
- Who looks at your credit score
- How to access a free copy of your credit score
Why is your credit score important?
Your credit score is basically a numerical indicator of your creditworthiness. Lenders, landlords, and even some employers use it to assess your reliability.
Having a good, or a high credit score can open doors to favourable loan terms, lower interest rates, and higher credit limits, potentially saving you thousands of dollars over time.
Being aware of your credit score helps you monitor your financial progress and identify areas for improvement. For example, if your score is lower than expected, it might indicate overdue payments, a high credit utilisation, or potentially errors in your credit report. Addressing these issues promptly can boost your score and improve your financial standing.
When you understand your credit score, you’re empowered to negotiate better terms when seeking credit products like mortgages, car loans, or credit cards. It also helps you avoid unnecessary applications that might negatively impact your score. If your credit score is bad, a low credit score, you should avoid making any credit applications as this will likely further reduce your credit score.
Knowing your credit score can also assist in protecting you against fraud. Regularly checking it ensures that any unauthorised activity or accounts opened in your name are detected early.
Knowing your credit score is essential for better decision-making and safeguarding your financial future.
Who looks at your credit score
Your credit score is checked by various entities to evaluate your financial reliability and determine your eligibility for credit or other services. Here’s who checks your credit score and why:
1. Lenders and Financial Institutions
Banks, credit unions, and other lenders check your credit score when you apply for loans, credit cards, or mortgages. They use it to assess your risk as a borrower and decide whether to approve your application, as well as to set interest rates and credit limits.
2. Landlords and Property Managers
When you apply to rent a property, landlords may check your credit score to gauge your financial responsibility and ensure you’re likely to pay rent on time.
3. Utility Companies
Utility providers, including electricity, gas, and phone companies, may check your credit score before setting up services, especially if you request postpaid plans.
4. Employers
In some cases, employers may review your credit report (not the score itself) during the hiring process, particularly for roles involving financial management or sensitive data.
5. Insurance Companies
Some insurers check credit scores to help determine premiums for policies like car or home insurance, as they may link financial habits to risk levels.
When you apply for a product or service with the above you are generally approving them to check your credit score. You will have signed something or ticked a box to agree to terms allowing them to access your credit report. In essence, your credit score is a critical tool for evaluating trustworthiness in financial and contractual relationships.
How to get a copy of your free credit report
Your credit report is available to you for free. It can be downloaded from any of the following sources.
Equifax Credit Report: https://www.equifax.com.au/personal/products/equifax-free-credit-report
Illion Credit Report: https://www.creditcheck.illion.com.au/
Experian Credit Report: https://www.experian.com.au/consumer/order-credit-report
Your credit report musty be provided to you for free every three months by credit report providers. These are government mandated conditions that are managed by The Office of the Information Commissioner (OAIC).
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