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Credit Score & Report


BUSTING DOWN THE MYTHS ABOUT CREDIT SCORES

21 March 2023Lloyd Smith 3 min read



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CHECK YOUR CREDIT SCORE TODAY

Check your score and get tips to improve it. It’s free, forever.

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Your credit score is one of your most valuable assets. After all, it could mean
the difference between being approved or not for purchases like your mortgage,
car loan, credit card or phone plan. So debunking some of the most common myths
about credit scores is a great way to understand how they work.

Let’s first take a look at what a credit score is.The credit scores you see on
ClearScore, provided by Experian and illion, are between zero and 1000. They
give lenders an idea about your creditworthiness – how likely you are to repay
money. A credit score encompasses a lot of information, including:

 * Your record-making loan repayments.
 * How many loans you have.
 * How many times you have applied for credit.
 * Any defaults you have had.

Let’s take a look at some common myths.


MYTH # 1 CHECKING YOUR CREDIT SCORE WILL IMPACT IT

Wrong! You can check your credit score multiple times without it ever-changing
as a result of you checking it. The only person who can see how many times you
have checked your score is you. What will impact your credit score is applying
for new credit (such as applying for some loans) – but your score will never be
impacted when you check it through ClearScore. In fact, it’s a good idea to keep
on top of your credit score so you can correct any errors such as debts
inadvertently recorded twice. It’s easy to check your credit score for free at
ClearScore simply by following this link. You can also take steps to actively
improve it, for instance always making your repayments on time and in full.


MYTH # 2 A DEFAULT WILL ALWAYS BLEMISH YOUR CREDIT SCORE

Also wrong. Only certain defaults, those that are more than $150 and which are
more than 60 days overdue, are reflected in your credit score and report. Plus,
they only stay on your credit report for five years. This is good news if you’ve
had a default in the past and have tried hard to meet your obligations since
then.


MYTH # 3 LENDERS DON’T CARE – OR WON’T KNOW – IF YOU DON’T PAY YOUR BILLS

Wrong again. Credit bureaus are alerted if you don’t pay your phone or power
bill and the information will be recorded on your credit report if the bill is
more than $150 and the bill is more than 60 days overdue. This information will
in turn be reflected in your credit score and it could drop. This may hamper
your ability to successfully apply for credit down the track. To maintain a
healthy credit score it’s a good idea to always pay your bills on time and in
full.


MYTH # 4 YOUR CREDIT SCORE WON’T CHANGE IF YOU APPLY FOR MANY LOANS

It really DOES matter how many times you apply for credit. This is because if
you apply for multiple credit cards or loans, it may appear as though you have
an urgent need for funds, which could be a red flag for lenders. So try to apply
for credit one application at a time.


MYTH # 5 IT COSTS ME TO SEE MY CREDIT SCORE

This is also a myth. You can get a free copy of your credit score and report by
going to ClearScore’s website. Better yet it is always for free with ClearScore
– you can check your report, alerts and so much more without paying a cent.
Although other providers may charge a fee, ClearScore’s philosophy is you should
never need to pay to get access to this information.


MYTH # 6 NO-ONE LOOKS AT CREDIT SCORES

Hold this view at your peril. Lenders will at the very least check your credit
report (which contains your credit score) every time you apply for credit. It
may be one of the main pieces of data they will use to decide whether to approve
or deny your application. If your credit score is healthy, they might be more
inclined to approve your application. But your application may be declined if
you have a poor credit score.


MYTH # 7 THE RICHER YOU ARE, THE HIGHER YOUR CREDIT SCORE

It’s easy to assume wealthy people have high credit scores, but this is not
necessarily the case. In fact, your credit score does not take into
consideration your assets. You may have thousands or more in the bank, or even
own your own home outright, but if you don’t pay your bills, your credit score
will reflect this. If you keep missing payments on any loans, no matter how much
money you have, your credit score will be impacted. Which is why it’s so
important to keep on top of your loan repayments.

Keeping on top of your credit score is one of the best ways to take control of
your financial future. So if you haven’t looked into your credit score for a
while, why not check it out today?

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WRITTEN BY LLOYD SMITH


GENERAL MANAGER AU

Lloyd spreads the word about how awesome ClearScore is.

Hand crafted with ❤️ in Sydney

ClearScore Australia Pty Ltd

ABN 21624386330

ACN 624386330

Australian Credit Licence 520783


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Level 17, 383 Kent Street

Sydney NSW 2000, Australia


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