No 1 - Other occupants can ruin your
rating
Unless you share an account or mortgage with your kid
sister, your uncle Wally or anyone else you happen to live with,
your credit rating will not be affected by the people you see over
breakfast. This is also true for partners, spouses and
housemates.
No 2 - A former occupant can shred my chances of
getting credit
This is another common misconception and like any other
myth, is completely untrue. If the previous occupant of your home
were a loan providers living nightmare, who had a catalogue of
missed payments against their name, you would not be tarnished with
the same brush. The credit bureau is only interested in you, not
where you live, so your identity will be treated completely
separately.
If, however, you would like to receive a free copy of your
credit report to ensure it contains no false entries, visit www.debts.org/credit_reports
for details.
No 3 - There is only one credit score per
person
Credit scores can vary depending on the lender's
assessment of your record. Basically, a lender will obtain a copy
of your credit file from a credit reference agency and apply the
information therein to a mathematical formula. At the end of the
calculation you will be classified as having either a good, bad or
ugly credit score.
Each lender will use a different formula therefore you do
not have only one credit score. As a result, if you are ineligible
for loan at one bank, your application may be accepted at the one
across the street.
No 4 - Former contract breaches are not listed on
my credit record
On the contrary, your credit record exists purely for the
reason of collating your credit history. Lenders like to know they
will get their money back, so they will have a look at your form to
see how you have treated other lenders in the past. If you have
made some late repayments or missed them altogether your
application will probably be turned down.
Your track record will go back 3 years but 6 if you have
been made bankrupt.
No 5 - 'I can't get credit because I am
blacklisted'
No, there is absolutely no way you are on a blacklist
because they simply don't exist. Sometimes it may feel like there
is a conspiracy against you when your loan or credit card
applications continually get denied, but it has nothing to do with
a blacklist. It will however, have everything to do with how you
managed credit in the past and how many times you have applied for
a loan in the last 12 months.
If you would like to know how to improve your credit
score, please visit
www.debts.org/credit_reports/improve_your_credit_score/
