Credit Scores explained and myth busted

MoneyHub publishes a ground-breaking guide to personal credit reports and scores, myth-busting misinformation and breaking down complexities. Personal credit reporting and scoring have until now been relatively unclear in New Zealand, triggering an investigation to be commissioned by MoneyHub. The results have now been published, and a comprehensive guide walks unfamiliar New Zealanders through everything they need to know when it comes to their personal credit file.

MoneyHub’s Senior Researcher Christopher Walsh said “We’re thrilled to be able to release this comprehensive guide, and believe it has tremendous value for every New Zealander”.

“In New Zealand, credit scores, credit reports and the process of a credit check are still somewhat smoke and mirrors despite the free data readily available by a number of providers. MoneyHub now outlines everything you need to know about credit scores, checks, files and ratings. We’ve also included a number of easy-to-action tips on how to increase credit scores in the short term and ongoing”.

“We want to put it out there that New Zealand doesn’t have a credit score “blacklist”, but individual lenders may refuse to give an applicant credit if they’ve proven to be an unreliable customer in the past. So if you’ve previously defaulted on loans, credit card and/or phone contracts, your credit score will be low but you won’t appear on any so-called national blacklist, nor will you be banned from applying for new credit”.

“We’ve also published a list of items that are NOT on a credit file – these include speeding fines, parking tickets, declined credit applications, salary, race, religion and medical history”.

“A big misunderstanding was the actual importance a credit score or report actually had when applying for credit. Our research confirmed that the actual application process, which indicates income, expenses, debts and personal finance commitments was far more important to a lender. For example, mortgages were ultimately considered by affordability, and not how impressive an applicant’s credit score was”.

“We encourage every New Zealand to request their free credit report from at least one agency, and challenge any irregularities immediately – the process is straightforward and you can resolve any problems before they hold up a credit application later on”.

“To ensure New Zealanders have ready access to their credit history, MoneyHub walks through each credit data currently providing free credit reports – these include Equifax, illion (formerly Dun & Bradstreet) and Centrix. The guide also includes the process of requesting data from Credit Simple, the only credit score company operating in New Zealand”.

The page would be updated on an ongoing basis, and MoneyHub confirmed a positive experience with all credit agencies and the credit score company it dealt with in the preparation of the comprehensive guide.

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