A recent survey of nearly 1,600 people revealed almost all respondents believed knowing their credit score was critical to improving their finances. To simply define, a credit score is a number that depicts a consumer’s creditworthiness. The higher the score, the better a borrower looks to potential lenders.
According to the recent survey conducted by Digital lender SocietyOne, it concluded 97.7% of respondents thought it was important for Australians to know their credit score; 93.3% said they found it useful to have finally learned their score through SocietyOne, and those who wished to improve their credit score and overall finances embodies 73.5%.
However, only 32.8% of respondents knew their credit score before being encouraged to check it and 60.9% were surprised by the result once they received their score. MoneyMe Chief Operations Officer, Jonathan Chan stated that “a credit score is an excellent indicator of financial health and many Australians appear to understand its importance. However, half of all Australians still have not applied for their score to know where they stand when applying for credit for a loan and finding out your score is only the first step”.
In addition, Experian General Manager of Credit Services, Tristian Taylor reminded them not to “forget that a credit score is simply a view of your financial health and the way you work with credit. Keeping on top of your repayments and choosing the right financial products for your situation are important factors in maintaining a strong credit score.”
Key factors that could influence the status of your credit score include:
- The type of lender you have applied to
- How well you’ve kept up with your repayments
- The credit limit of each of your credit products
- The type of product you have applied for
- The number of credit applications you make
- Any negative events, such as defaults, judgments, or bankruptcies.
Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.