How the Credit Rating System Works

A great credit rating could mean that you’re getting the best credit card or mortgage rates on the block. On the other side, though, a bad credit rating could mean that you may find it extremely difficult to find any type of loan. In some extreme circumstances, a bad enough credit rating could make it hard to find a place to rent. In order to have the best credit rating around, let’s take a look at how the system works.

How is credit rating information determined?

In Australia, a consumer’s credit file is maintained by an agency known as the Veda Advantage Agency. Anytime a consumer declares bankruptcy, pays late or defaults on a loan, this will show up on a credit report within 30 days. Any time a lender retrieves your credit report information, these negative remarks will show up. These negative remarks will also bring your score down. Combining a variety of factors, the credit agencies will be able to determine a score.

What are the score ranges?

Credit scores are going to range between zero to 1,000. Zero is the worst score that you can get while a 1,000 can be the greatest. The average credit score in Australia tends to be around 725 to 750. If you don’t have your credit score just yet, check this out to see what your score is today. With that being said, let’s take a look at some common ranges and what they mean for you:

450 or below: These scores tend to bring in higher interest rates. A high rejection rate from lenders can also apply.

450 to 650: Still considered to be bad credit. Rejection rates are still relativity high and many reputable lenders tend to reject this score range.

640 to 720: Hovering around the average mark, interest rates tend to be in the middle. Rates can raise if the score jumps 50 to 100 points.

720 to 820: Tends to be in the average category. Consumers that are responsible with their credit with no defaults or bankruptcies will find themselves here. Low interest rates and most banks will approve your loan if conditions are right.

820 and above: This is the cream of the crop. The best interest rates will be available, and banks will be fighting for your business.

What is on my credit file?

A credit file is filled with the following information:

- Credit Applications: Any credit card or Payday loan that has been opened will show up here. It will show the payment history, the name of the loan and the balance left on the account. Even if the account shows a zero balance, it will still show as long as it’s active.

- Inquiries: Any time you apply for a loan, an inquiry will be listed for a limited amount of time. Even if you never go ahead with the loan, credit checks will also be noted. Inquiries generally play a minor role in regards to your credit score.

- Judgements and Bankruptcies: Any liens, judgements and bankruptcies will negatively be displayed on your report. Australia law states that bankruptcies must be removed after seven years. Any judgement can stay on your report for up to five years.

- Personal Information: All person information such as your name, employment history, address, driver’s license and date or birth will be shown.

Bankruptcies, late payments and judgements can harm your credit score a bit. Don’t be scared if your score is low. Keep in mind that by working to pay your bills on time and waiting, your score can gradually rise. Even as time goes on, an established report can raise a score, too. If you haven’t downloaded your credit report yet, be sure to visit here to see where you stand.

{ 0 comments }

Novated Lease
A novated lease in Australia seems to be a great advantage to employees. Employees are able to get transportation with the help of their employers through work programs. This is an awesome idea considering transportation is one of the main reasons for work tardiness, call outs, and most of all high turnover rates. Depending on how far you are located from your job, it can really be a pain trying to get to work everyday on time, especially if you live quite a distance. In many cases we are finding that people are more likely to seek employment in other counties for better pay, which makes transportation a must. Use can use the novated lease calculator to work out your savings.

In a novated lease the employer leases a vehicle from the leasing company for the employee, and makes the payments monthly on the car and a portion is deducted from the employee’s check each pay period. This is a very interesting idea to keep employees from ruining their credit. Doing it this way provides them a reasonable way of paying for a vehicle without going broke, and the best part is that if the employee decides to switch jobs, he/she has the option of transferring the agreement to the new employer. This is also a very unique approach to help more people be able to afford their own vehicles.

A vehicle lease not only benefits the employee but the employer as well, because this type of arrangement can be an effective amenity to employees and it will definitely help companies avoid high turnover rates. It’s kind of like giving your employees a raise for their hard work. Employees even have more choices on the types of cars their interested in. Isn’t this awesome? Generally, this type of agreement benefits all parties involved. Everyone wins in this type of agreement. Of course in every agreement you will find disadvantages, but in this case the benefits are far greater. Maybe you can’t trade in a vehicle on the lease but depending on your income you can save money. This arrangement restrains you from going in debt. It is so easy to fall into debt when leasing a car on your own because the payments are higher, and we tend to try and stretch our income beyond what we actually have. Have you heard of people spending money you don’t have? People do it everyday, and not with just leasing a car but also with their everyday spending. This is an excellent way to finally have your own vehicle.

A novated lease can provide you lots of coverage to cover your car through insurance, car insurance can be packaged in to your novated leasing costs.

{ 0 comments }

CAR FINANCE
There are many smart options to choose from when considering car financing.

The purchase of a car, price of which is more often out of an individual’s reach, without the need to borrow money is made possible by car financing–an arrangement allowing someone to acquire a car without the worry of a one lump payment. Australia has several car finance options. Features like rates from car finance companies may vary from a range of 8.95% – 15.49% for new or old cars with flexible contract terms from 2 to 5 or sometimes up to 7 years. These features were designed to provide solutions depending on an individual’s financial situation or needs. There are several financial institutions that give assistance and access to the best Car Finance products in Australia. Online, there are also sites that give information on many car loans available in the market to Australian drivers plus many more so interested drivers can choose what is best suited to fit their needs.

In today’s world, consumers can inform themselves well in terms of establishing a car finance game plan. Generally, the longer the finance period, the more money one will end up in paying for the car and with car financing companies eagerly seeking business take the time to ensure to get the best bargain. The internet, available 24/7 and most often in the comforts of ones home and convenience of time, can provide a wide variety of knowledge for eager learners in getting the best car finance.

{ 0 comments }

AUSWEA is a way of getting the best deals on car finance. If you’ve never purchased a new car before, the idea of getting car finance can seem a little daunting because you don’t understand all the tricks involved for getting the best deal. Guess what? I’m here to share what information with you so you score the best possible deal!

First up, will you be getting finance from a bank or from the dealership itself? It pays to shop around for car finance or a novated lease for a few reasons. Banks don’t always offer the best deal on a car loan and the same can be said for the car dealerships themselves. Don’t ever accept an offer for finance without comparing it with offers from competitors.

The benefits of getting car finance for your purchase comes with many benefits. The great part is you don’t have to pay for the car in full upon purchase. You get to drive around in a brand new car without a large upfront payment. It’s great for people that don’t have lots of money saved up and lets face it, that goes for most of us.

This comes at a price and that price is named interest. For example, let’s say you loan $30,000 from a bank and opt to repay that amount over a 3 or 5 year period. Upon the last payment, you will have paid a % of interest that increased your total repayments to $35,000 or perhaps more. Provided you maintain your car and have it serviced regularly, you can reduce the amount of depreciation on the vehicle itself and earn back the interest upon selling the car.

Use our Novated Lease Calculator to work out your car finance repayments.

Other finance we offer is on fixed home loans nationwide.

{ 0 comments }