Find answers to the most commonly asked questions including how to improve your score.
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Your VedaScore is like a credit rating. It is a number between 0-1200 that summarises the information on your credit report at a point in time. In simple terms, the higher your VedaScore, the better your credit profile and the more likely you are to be accepted for credit. If you've got a low VedaScore, your credit applications may only be approved by lenders that charge a much higher interest rate or you may have difficulty gaining access to credit at all.
Your VedaScore is calculated based on the information held on your credit report at a given point in time. Your VedaScore is dynamic so will change over time.
There are a number of key contributing factors that are taken into consideration when generating your VedaScore:
Type of credit provider
The type of credit provider making an enquiry on your credit report may impact your VedaScore. E.g. there may be different levels of risk associated with approaching a bank, store finance provider, hire-purchase and utility company for credit.
What's more, research shows that there's a different level of risk associated with lenders in particular industries. E.g. a non-traditional lender may have a different level of risk than a bank or credit union.
The type and size of credit requested in your application
Both the type of credit and size of the loan or credit limit you have applied for in the past can have an impact on your VedaScore. E.g. mortgages, credit cards, personal loans and store finance may carry different levels of risk.
Number of credit enquiries and shopping patterns
Every time you apply for credit and a credit provider obtains a copy of your report, an enquiry is added to your credit report. This can include any loan, mortgage or utilities applications you may make. Shopping around for credit and applying to a number of different credit providers within a short space of time may negatively impact your VedaScore. It flags you as a greater risk than infrequent applications for credit with a few credit providers.
Directorship and proprietorship information
Directorship and proprietorship information on a credit report may impact your VedaScore. If you're a director or a proprietor it's important to check the individual and commercial sections of your credit report.
Age of credit report
The date your credit report was created may impact your VedaScore. E.g. a relatively new file may indicate a different level of risk than an older report.
Pattern of credit enquiries over time
The spread of activity over the credit report's life to date can have an impact on your VedaScore. E.g. a relatively new credit file with many enquiries may represent a different level of risk than an older file with only a few credit enquiries.
Your VedaScore takes into consideration personal details such as age, length of employment and length of time at your current residential address to assess risk.
Default information in your personal or business credit report such as overdue debts, serious credit infringements or clearouts may negatively impact your VedaScore, while a lack of default information in your file may positively affect your score.
Court writs and default judgements
A court writ or default judgement on a credit report is an indicator of increased risk and may negatively impact your VedaScore. Conversely, a lack of court writ or default judgement information would indicate a reduced level of risk.
Commercial address information
Information such as location and the length of time you have resided at your current business address is a measure of stability and may impact your VedaScore.
Here are five things you can do to improve your score:
A record of your credit history. If you've ever applied for credit, such as a credit card, personal loan, mobile phone contract or even store finance it is likely you will have a credit report.
Your credit report contains information such as applications you have made for credit, whether you make repayments on time, overdue payments, defaults, court writs, judgements and bankruptcy information.
It is important to understand what is on your credit report as it is what credit providers like banks, phone and utility companies can check when you make an application for credit.
Your credit report includes information such as:
No, these are not included on your credit report. However, if you end up with a court writ or judgement, perhaps through not paying one of these, it can be included on your credit report and will negatively impact your score. Your credit report contains information on credit accounts for example a credit card, personal loan, mortgage, store credit/interest free finance, phone and utility contracts.
A credit provider can list a default on your credit report if you have an unpaid bill which is more than $150 and more than 60 days overdue.
Before listing a consumer default, the credit provider must take a number of steps including sending a notice to your last known address requesting payment and sending another separate notice stating that the debt may be listed with a credit reporting body.
For more information on credit reports and VedaScores visit veda.com.au/yourcreditandidentity