How you can find out your credit score

Jonathan Leane, Chief Innovation Officer, Compare Club,

John Deeks: We have Jonathan Leane, the Chief Innovation Officer from Compare Club on the line. Thank you for joining us on Mind Your Own Retirement. How do you find out your credit score and why is it important?

Jonathan Leane: It’s a good question. There are a few different ways you can find out your score. Being the Chief Innovation Officer of Compare Club, I’m partial to people visiting our website and having a look:

But there’s three different credit bureaus in Australia:  Experian, Equifax and one called Illion. All three credit scores are going to be slightly different so it’s worth speaking to all three providers.

You’re entitled to a free score from each of them twice a year. The reason why it’s important is because your credit score is essentially a three-digit number that basically tells potential lenders how creditworthy you are, so a high score means that you are seen by banks and other lenders as a good credit risk.

And in return you typically see significantly low interest rates compared to someone who has, for example, a slightly lower credit rating.

John: How does one get a good credit rating?

Jonathan: There’s a few ways to do it. The obvious one I guess is to always pay your bills on time. But there’s also things you can do to improve your credit rating.

Aside from that, like taking out new credit cards, for example, and then reliably paying bills on those, and avoiding things like bankruptcies. One of the really good reasons to grab your current report from all three providers is just double checking that you don’t have any incorrect late payments or delinquencies listed on your report.

There is a process to ask for corrections with each of the bureaus, if you see some stuff on there that you don’t think should be on there.

Kaye Fallick: Jonathan, that’s really interesting. It may be that you’re having a dispute with someone.

Jonathan: Absolutely.

Kaye: And you’re not paying them because they haven’t delivered service, but that might be weighing against you. Is that correct?

Jonathan: Absolutely. It can even be stuff like, for example, you might have moved to a new house and cancelled your electricity, but they might have taken a month or so after you’ve moved to cancel the account. In this example you might end up accidentally not paying a bill at an old address.

And that can significantly impact your credit rating. As long as you have proof that you have cancelled this account on date X there’s a very good chance that you can get those things removed from your credit profile.

Kaye: So, when you’re checking your credit score, (it’s something I haven’t done) I’m wondering how safe it is if they’ll be asking me something I don’t want to reveal online.

Jonathan: That’s definitely a valid concern. There are always going to be some personal questions when it comes to getting a credit score because it is such sensitive information. In the case of Compare Club, we have very strict security and ID verification processes.

We will ask you all the normal kinds of contact details like your name and your address and stuff like that to actually match you with the correct profile. But we’ll also ask you to provide some form of identification to make sure that you are who you say you are. So that could be a driver’s licence number or a Medicare number etc.

I would definitely want people to be wary of companies that don’t ask a couple of personal questions. Because if they’re not asking for any kind of ID verification, it means that there’s probably something untoward happening.

Kaye: Are there other things you need to be aware of if you’re going to use a credit score website.

Jonathan: Not really. The important thing to remember is checking your credit score doesn’t impact your credit score. So, you’re able to check your score with many different websites and as many different providers as you want. It should be free, and it won’t impact your credit score in any way.

One thing to potentially be wary of is just making sure that you’re dealing with reputable companies. Make sure that you have a read through the privacy policy and the terms and conditions. Make sure they’re working with one of the big three credit providers in Australia. And don’t be afraid to ask questions before you hand over any personal information.

Kaye: So, the big three that you mentioned, can you say them again?

Jonathan: Experian, Equifax, and there’s another one called Illion. So, they’re the three big ones in Australia. The reason why it’s important to get your credit report from all three is because each of them will work with a slightly different set of lenders, although there is a lot of overlap. For example, you might grab your Experian credit report through our website, Compare Club, and there might be stuff listed on your Experian credit report that’s not listed on your Illion credit report.

When it comes to applying for a credit card or a loan or even something like an electricity provider, because most of us don’t prepay our electricity. The electricity providers essentially give us credits for the electricity and then we pay that be every quarter. You want to check in and make sure that your credit report is in good standing with all three bureaus because there’s no way of really knowing in advance which bureau a specific lender is going to use.

John: Well, Jonathan, you’ve given us a lot of food for thought and a, as you say, it does not cost anything to have your credit score checked. It’s probably a good thing, a bit like a health check.

Kaye: Absolutely and I think if you’re serious about your budget and your spending, work out, first of all, what your credit profile is.

John: Jonathan Leane, thank you so much indeed for giving up your time today.