Credit Scores

This is the biggest credit myth out there! We make a ‘soft enquiryʼ with participating credit reporting bureaus. That means it is technically recorded, but it does not impact your credit score in the slightest. Credit providers are not able to see soft enquiries, so no dramas.

In Australia, credit scores are used by lenders to understand how reliable someone will be in paying back credit.

It usually plays a role in these situations:

• Taking out a loan or mortgage

• Signing up for a new mobile plan

• Setting up an account with an electricity or Internet service provider

• Getting a new credit card

• Buying a car through dealership finance

The exact way credit scores are calculated is kept under wraps by the bureaus. A true magician never reveals their secrets! 

However, we do know the main information used to calculate your credit score.

Past credit agreements. Such as utility contracts, credit cards, bank accounts, previous loans and phone and internet service. Details such as who offered the credit, any limits on it and whether it is currently open or closed are taken into account.

Credit applications. All past applications you've completed are documented, even if they were unsuccessful.

Your payment history. This includes if you've made repayments on time, had accounts in arrears or defaulted.