You don’t have a “national” credit score
There are four (or three, depending how you count them) credit reference agencies here in Aotearoa New Zealand and they all look at credit data differently. A credit score is a range (for example, Credit Simple scores you between 0 and 1000). Your score will not be the same across different providers, but it will usually be similar. You can talk for FREE to a Financial Mentor about ways you can improve your credit score.
Do you need to worry about being blacklisted?
New Zealand doesn’t have a credit score “blacklist”, but individual lenders may. There’s also no list of banned people. If you’ve defaulted on loans, credit card and/or phone contracts, your credit score will be low but that doesn't mean you can’t apply for new credit.But - a lender may have a "bad customer" file. If you've defaulted before, it's likely your lender has you on a list
Lenders and other companies pass on your information
Whenever you get credit, how you behave is recorded and reported to at least one of the credit reference agencies. BOTH positive and negative things are counted. Defaults, missed payments and bankruptcies appear alongside good things such as on-time payments. Whenever you're late on a bill it’s noted, so tell the lender if you can’t pay; it may make a difference.
Every lender checks you differently, and they won’t share the details with you
Lenders like shops, credit cards, or car dealers use different credit report agencies, and have their own private ways to decide “yes” or “no” to credit applications. They don’t have to say why they make a decision.
They may say no… but there are usually other options
If you have missed payments or defaulted in the past, you are more likely to get a “no” to new credit. It’s not personal, it’s just lenders minimising their risk. Some firms offer finance to people with “bad credit”, but they charge higher interest rates. If you’re ready to work on your personal finances, use the Spring Safe Lending finder to find lenders who may help you.
The information in your application is VERY important
Your credit history and credit score aren’t the only things a lender looks at. If you’ve had a relationship with the company before this may help. The personal details in your application such as income, debts, expenses and things that you own are important. You might want to get someone you trust to check what you write. It’s easy to add too many 000s or forget something.
A credit score helps lenders predict the future
A credit check looks at all of your data hoping to predict how you will behave in future. If you don’t have much credit history it is harder to have a credit score. But if you’ve had a phone and/or a credit card, there will be some data. The more info you can send with your application, the more accurate the estimate will be.
Lots of credit applications can have a negative effect
Moving your debt to another credit card at a lower interest rate can give you breathing space, but all your applications will show on your credit report. If you use these offers again and again, that may be a red flag to lenders. Credit scoring is a secret so we don’t know for sure how an application today might affect later ones, but remember you’re being watched.