If you’re an adult in New Zealand, the chances are that you have a credit score, whether you’re aware of it or not. Even if you’ve never borrowed money, information about what kind of financial citizen you are is recorded by many of the organisations you deal with.

This information is held by one of three agencies:

  • Equifax (previously Veda)
  • Dun and Bradstreet
  • Centrix

The purpose of this is for financial services companies to check if you’re a good risk before they lend you money. Your credit report will also likely be checked by prospective employers or landlords, and even power and phone companies when you want to open an account with them.

What information does it hold?

Aside from your personal details, your credit report records both negative and positive information about your financial history. On the negative side, it notes defaults (if you have missed a payment by more than 30 days and the company has tried to recover the money from you), court judgements, and bankruptcies. It’s important to avoid any of these situations because even paid defaults can remain on your record for five years. On the positive side, it records payment histories for things like credit cards, hire purchases, mortgages, etc., which demonstrate how responsible you are when repaying your credit. It may list your current lines of credit and the names of the providers. Lastly, your credit report also records any inquiries made, so it’s important to refrain from applying for too many credit facilities at once. Lenders are likely to interpret this as a sign that you’re in financial difficulty.

How do I get a copy of my credit report?

You are legally entitled to a free copy of your credit report upon request. Because any of the three agencies named above may hold information about you, it pays to contact all three. You can place your order online and turnaround times vary from 3-20 working days. If you need your report urgently, you can opt to pay for faster delivery.

What’s a credit score?

Your credit score is a numerical representation of your credit history, ranging from 0 – 1000. The better your history, the higher your score. A normal, healthy credit score is usually between 500- 600. Be aware that your score will fluctuate over time, and differ between agencies, depending on the information they hold on you. In most instances, you need to pay to request your credit score, as it’s not part of the free report. However, Dunn & Bradstreet are one agency that offer this information for free at their Credit Simple website.

Why should I request a copy of my report?

Having a good credit report is vital if you wish to borrow money, change jobs, rent, or even sign up to a mobile phone plan. If you’re planning to do any of these things, requesting a copy of your report beforehand is a great idea. It’s important that you review your report to make sure there are no errors that might have an impact on your financial plans. With identity theft on the rise, and sometimes just through human error, sometimes defaults or other negative information is registered against your report through no fault of your own. If this happens, you can work with the provider concerned, and the credit reporting agency, to have the mistake removed before it causes you any problems.

So, while you might not normally pay much thought to your credit report, it’s a good idea to review it occasionally to make sure it’s clean. Keeping up-to- date with all your financial obligations will ensure it stays that way.

At Best Mortgages, we can assist you with the mortgage process, even if you do have some credit problems. Contact us for your no obligation and free service with unbiased mortgage advice.