Learn More about Credit Checks In New Zealand
Your credit score determines the amount you borrow from the lenders. We will show you how to check your credit for Free in New Zealand. Our team have put together all the information and tips on how to check your credit score for free
WHAT IS MEANT BY A CREDIT CHECK?
A credit check, also known as a credit inquiry, is an action performed by the lenders to determine the financial history. It can also be termed as the credit history check because, through it, they access information regarding your previous credits, the habit of payments, and the types of loans you requested in the past to know your level of risk as a debtor.
You will realize that when you are borrowing a loan, the lender will conduct a credit history check. They will be checking your credit reports preserved by the three main credit bureaus. From your credit reports, they will determine whether to give you a loan and the amount of loan they will offer.
WHICH ARE THE FACTORS THAT DETERMINE MY CREDIT SCORE?
Do you know that you may have been banking in a lending institution for the same duration with another individual, but your credit scores can differ? Why such a scenario? Are the lending institutions biased? The following are the factors that affect your credit score:
Payment History: How have you been paying your previous debts? Your payment history is the main ingredient when it comes to credit rating checks. The credit rating check companies usually do your credit history check to determine how you have been paying your previous debts. If you have been paying your debts on time, there is a high probability of paying the credit you seek in time and vice versa.
Utilization of Credit :
You will realize that the lender will ask how you would like to utilize the funds whenever you are borrowing a loan. The project you are going to finance must be viable so that it can bring profits for you to pay off your loan. Thus, credit utilization is the second factor affecting your credit rating check.
Credit History Duration:
The credit rating check companies in New Zealand will check the duration it took to pay off your previous debts while doing your credit history check. This is done by averaging your oldest debt period and the previous one; the longer the credit history duration, the higher your credit score and vice versa.