Credit profile
A credit file is kept for any person who has been credit-active – that is, has borrowed money (for a credit card, mortgage, car etc) – over the past seven years. Your credit file is updated every time you apply for new credit. This credit history impacts on whether or not a credit provider will approve your loan; how much importance is placed on it will depend on the lender.
What is on a Credit File?
Your credit file contains information about you and your credit activity over the past seven years, including:
- Personal details such as: name, residential addresses, date of birth, drivers licence number and current or previous employer
- Credit applications and inquiries you have made during the past five years
- Records of some current credit accounts
- Overdue accounts (defaults) which have been listed against your name, including an indicator on whether the default amount has been paid or not
- Bankruptcy information
- Default judgements
- Public record information
What is included in Public Record Information?
Public record information includes:
- Judgement and writ/summons information obtained from the various courts around New Zealand
- Bankruptcy/Part X/Part IX information
- Directorship information
- Proprietorships
How can I get a copy of my Credit File?
If you are applying for a home or business loan, it is a good idea to get a copy of your credit file prior to applying for a loan. You apply for your credit profile online at www.mycreditfile.co.nz for minimal costs. Obtaining a copy of your credit information file will assist you in understanding, assessing and managing your own credit-worthiness.
Tips for maintaining Credit- Worthiness
- Pay bills on time. An overdue account is usually a debt that has been owing for a minimum of 60 days. Unpaid accounts will remain on the database for seven years.
- Call your credit provider(s) in a timely manner and alert them if there is a problem meeting your commitments.
- Review your credit file to make sure there are no errors in the information and/or discover any overdue accounts that have been forgotten about.
- Monitor your credit file to ensure someone is not fraudulently using your identity.
- Limit credit applications necessary situations only. Each new application is recorded on your credit file and too many applications, even for loan pre-approval, can be an issue for some lenders.
- Remember that the details of all overdue accounts, even when paid, remain on your file for seven years from the date of listing.
What do I do if I have past credit issues or a bad credit history?
In New Zealand, even if you have a negative credit history, you may still be able to secure a competitive home loan. Make sure you are aware of all your options, starting with the following information:
- Inform your mortgage broker and lender at the outset of any problems credit history. Your mortgage broker will show you loan products that take your situation into account.
- Explain each problem, why it occurred and how you rectified it.
- Negative responses to credit applications do not necessarily mean your credit file is flawed. Credit providers each have their own lending criteria, so seek an explanation.
- Investigate securing your loan through a non-conforming lender. They consider applications from people with past credit issues. However, you will need to prove you are now in a position to support the loan.
For more information on your credit profile
For more information on your credit file, or the home loan that is in your best interest, talk to your local mortgage broker or call us at any time on 0508 722 205 (+64 9 377 7347).
