Do you know what your credit rating is like?

Posted by Paul Ryan • 14 January 2014 • Tags:

One of the key questions intouch Finance Principals ask their clients is if they know what their credit rating is like?

Unfortunately it is not a question we as consumers get asked every day and therefore not one we can answer with confidence. The answer tends to be “as far as I know it is ok”

The reason for what could be considered a vague answer is because you would be surprised who can now complete a credit check on you and who can register a default against your name.

In simple terms it is a company and or organisation who you have made an application to in terms of credit, a lease or rental agreement or a supplier such as telco’s, electricity, gas and  rental companies. The list goes on.

The importance of a clear and clean credit rating is one of your most important assets and you should do everything you can to protect it.

The “as far as I know it is ok” response is compounded with massive frustration if and when we get to establish there is an adverse mark against our name when it comes time to borrowing money.

An adverse credit history is where someone hasn’t paid their bills on time and the company or provider you owe money registers a default against your name so that next time you apply for finance you encounter problems.

If you are unsure of your credit rating you can make an enquiry online through Veda or Dunn and Bradstreet

There a number of things you can do to protect your credit rating.

  • Always pay your bills on time.
  • If you are experiencing difficulties do not run away from the problem. Contact your provider and let them know of your issues and more often than not they will accept your honesty and work with you to determine a repayment plan. It is the lack of communication that forces their hand.
  • Unless you are a genuine buyer of a particular product or service do not allow anyone to do a credit reference check. When someone asks you “what your credit rating is like?” there is no need to answer them unless you have made the commitment to purchase or sign the agreement.

This is important because if you have a number of credit enquiries against your name irrespective of whether you have purchased anything you could create the perception of being a “credit junkie”

The importance of being intouch with your credit rating should never be underestimated.