A Credit Score is the easiest way for you or a Credit Provider to see the state of your Credit File without actually having to look at one and acts almost like a kind of shortcut for Credit Providers to help them determine your creditworthiness.
Companies like banks, payday lenders and credit unions will often use a credit score to help make a decision whether or not they’re willing to lend you their money and, at times, can even influence the interest rate they give you.
How is your credit score calculated?
Credit Reporting Bodies like Equifax, Experian and Dun & Bradstreet collect you’re some of your personal and financial data, marking it down on your credit report.
They then use this information, comparing it against other credit files, to dictate what your credit score is. Things like:
- Defaults (any unpaid debts that have been marked on your file)
- Employment history
- Enquiries (Made whenever a Credit Provider checks your file when you apply for a loan/credit card)
- Where you’re currently living and where you lived in the past
What Is A Credit File?
It is a report that contains the information about the borrowing and repayment activities of the individual. Financial institutes check this file to get credit score details of the borrowers when they apply for a loan to ensure whether they are at a good or bad credit risk.
How To Order A Free Equifax Credit File?
Equifax (previously Veda) is the main credit reporting body we’re using to check credit score in Australia. Dun & Bradstreet however, still does have a presence.