Ever wondered what lenders know about you?

3-minutes read

When you apply for credit, your lender usually accesses your credit report (an extract of your credit file). So, what, exactly, does this tell them about your debt?  
 
Quite a lot, as it turns out. 

🙋‍♂️ How many accounts 

Your lenders can find out how many credit accounts you've opened, as well as their balances. This indicates how often you change financial products or get new ones. Plus, it suggests how much risk you're already facing.   

📄 How many enquiries 

Your credit report also reveals how many times you've enquired about credit. Whether you were given it or not doesn't matter. 
 
Lots of enquiries can indicate you are a higher risk borrower, particularly if the enquiries were for small loans, which might suggest a lack of cash flow. 
 
Usually, enquiries are recorded when you reach the stage of telling a lender you want to pursue their offer. They then stay on your report for up to five years. 

🗓️ What you're like with repayments 

Your lenders can also see what you're like with repayments. This includes your good behaviour (like repaying on time) and your not-so-good (like late and missed repayments).  
 
Do you tend to miss deadlines by a day or two? Missing your repayment deadlines can lead to pesky late payment fees and you’ll pay more in interest, so it's best to pay on time. However, being a couple of days late won’t impact your credit file. Repayments must be 14+ days late to get on your record. But, once they're on, they remain for two years. 
 
If a repayment is $150+ and overdue by 60 days+, then it might be added as a default, and will hang around for up to five years (ouch). 

If you find yourself struggling financially, get in touch with your lender to discuss your situation.
 
An important thing to note is that financial hardship arrangements are not included in the calculation of your credit score, which means they won’t impact your score.​

💪 Want to do better? 

If, historically, you haven't been as reliable as you are now, you can improve your standing.  
Key to this is turning your bad habits into good ones by: