Credit ratings and credit cards

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  burningrage on 17/12/2014 - 17:54

  As a start, I think the Credit Rating (Veda) in this country works by how many times you have applied for a Credit facility in the last x years and the more you DON'T apply for a credit facility, the better your rating will be eventually.

  The reason for this I think is because if you have no adverse listing (eg: default) against you, then there is really no reason for them to give bad rating even if you have lots of credit cards.

  Lastly, I feel this credit rating system is nonsense overall. I don't like it because like you just exemplified, you were never late but they still score you average or below.

  This is why I finalized all of my credit card needs BEFORE that stupid Credit Rating law kicked in. Now I don't need it.

  The only thing I am thinking of is if I need to refinance my mortgage, what would happen to that?

  I got an Average rating.

  • 

    twoface41face on 17/12/2014 - 18:01

    Yeah I've read that we're on of the view countries that generate credit scores in this manner. In most other countries they generate credit scores by the number of times you're late with payments and negative incidents you have.

    What do the banks say if I were to apply for a home loan soon? Would people gets the chance to explain the situation or is it a person in a room saying yes or giving the flick?

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  Geewhizz on 17/12/2014 - 18:19

  Your credit score is a number calculated from information in your credit report at a point in time. Credit reporting bodies such as Veda assemble credit reports based on information like your outstanding credit and your payment history.

  To address the issue- what can I do to increase my credit rating? Is there anything that can be done or are we all just looking at waiting for time to lapse?

  I have no idea whether it would have any immediate impact, but closing some of those accounts you currently have would reduce your outstanding credit significantly.

  • 

    burningrage on 17/12/2014 - 18:52

    I have been following this for a while now.

    If you had a chance to get your credit report BEFORE the Credit Reporting law kicked in (from Veda especially), you will notice it actually listed down two things. First, an enquiry has been made and Second, the value of that enquiry. That is, it may say National Australia Bank - Credit Card, Value $50,000.

    But there is nothing in my report that suggested any defaults. I recalled I even had one from Live Connected for $15.

    Since that information stays there, it would therefore unlikely even if you close that account (eg: Credit Card), your rating would improve.

    As it stands, it would appear to be a "time lapse" thing.

    Also people need to remember, Credit Rating is just ONE of the many factors they consider before approving credit to you. It is not the determinant. Obviously having a default mark is not a good start.

    Since the Credit Rating law kicked, I have been granted one new credit card with relatively high limit so I guess that proves my point Credit Rating is just one factor.

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  c64 on 17/12/2014 - 18:46

  what a pain! i usually order a free credit report once per year at checkyourcredit.com.au but now they wants id verification.

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  donga100 on 17/12/2014 - 19:28

  I was rated as a good credit score but can't respond to your poll as I don't apply for any credit cards because I don't feel like the rewards are worth the effort.

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  c64 on 17/12/2014 - 20:30

  +1

  i love how people will so eagerly type all their personal details in to some random web site :) i'll pass