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Credit scores in Australia are prepared by a specialized agency providing all information with regard to the credit history of a person. The credit worthiness of an applicant is the main determining factor for lenders. Details with regard to bank accounts, previous loans, bankruptcies if any, late payments and cheques bouncing due to insufficient funds are looked at by the agency. Any arrears of payments are listed as a default on a file of this nature. If a person has a history of poor debt repayment, they will be treated as a high credit risk customer, and maybe refused credit or might end up paying a higher rate of interest. The current system in Australia covers only the negative credit information. It is being said that positive credit information will be included in the file shortly.
How credit scoring is done in Australia
The two main credit reporting agencies in Australia which do credit scoring are Veda advantage and Dun & Bradstreet. Lenders calculate a person’s credit score to assess the risk they pose to them in terms of repayment. The higher the score, the lower is the rate of interest offered. The credit score is based on a scale of 0-1000 with the average credit score being 750. Credit scores in Australia are capable of preventing lenders from giving money or giving it at a higher rate of interest people must check their report from time to time just to ensure that everything is in order. Providing details such as name, address, date of birth and driver’s license number is more than enough to get a copy of the report. Mostly, default listings and historical information cannot be removed from a credit report unless it is proven to be wrong.
Debt management is taking actions to reduce debt
Some debt management solutions include reducing credit card debt which is the first step to reducing all debt. Transferring debt to an interest free card is another debt management solution that can be looked at. This method will be suitable only if the borrower finds it possible to repay all the debt on within a prescribed time period. Giving the bank standing instructions with regard to credit card payment is a good step that eliminates all late payment charges. Debt consolidation loan is the most effective way to reduce debt, as it has many advantages in a single plan.
How people improve their credit ratings
If there are any errors in a credit report, people immediately get in touch with the reporting agency with documented proof showing the error made. Paying on time and paying down debts increases the chances of a high rating. Unused bank accounts with no negative reports also play a vital role in boosting one’s rating. Those who use a combination of credit types get their scores boosted up. Combination of credit types would include having a car loan, house mortgage and efficient use of credit card. Having an addition on credit card with perfect history also helps to a great extent.
Author has many years of experience in content writing. He is the most celebrated and acclaimed author in financial sector. His many articles have been published online. Now he is providing information on credit score Australia and debt management solutions online.
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