Credit Score Requirements - For Australia
- Car Insurance,
- Sep 18, 2019
Taking loans for buying something is a concept we all are well aware of. Generall, we need loans when we are planning to buy a car or a house. In almost all countries, taking loans require some legalization of certain terms. One must be eligible to take loans and that eligibility criteria are measured in terms of a lot of things.
One such thing is known as the Credit Score of the customer.
What exactly a credit score is?
A credit score basically is the record that tells you about your recent financial dealings and transactions. All these financial details of the customer after some mathematical calculations, generate a specific score which is then judged according to the company policies and required criteria.
Companies actually use this thing as a safety precautionary measure in order to avoid themselves from loan defaulters.
The credit score is not calculated according to our choice but unfortunately for us and fortunately for the concerned company, it is based on the record of both good and bad financial dealings we have completed.
The credit score depends on a lot of different financial things out of which, most of them are listed below.
1- Arrears in Credit
2- Employment Stability
3- Residence Stability
4- Credit Cards Activities
5- Phone call Details
6- Credit History
7- Repayment History
All these things come into play when you want loans and the company requires your credit score.
How to Calculate
Calculating one's own credit score is not a cup of tea. Credit bureaus are required to do this process for you. These are the people who will collect, maintain and analyze your credit details and history.
After finalizing these details, the experts will create a credit report that will be showing your credit score.
A Good Credit Score
No specific score is considered to be the final judging criteria because banks do not disclose this information. However, the credit bureaus based on their experience managed to create a range between good and bad credit scores.
The range can be seen in the passage below.
A credit score between (833-1200) is considered the best and excellent. This means the risk of you being a loan defaulter is extremely low and you have a clean past.
2- Very Good
A very good credit score lies between (622-725). This range categorizes you in the list of top 40% most trusted Australians.
(622-725) is the range of a good credit score. It places you higher in the list of eligibles and the chances of getting a loan are very high.
An average score is between (510-621). Now the range is getting critical as far as the chances of loan approval are concerned. A few adjustments will be made as per the advice of credit experts and you could be in line to get a loan.
5- Below Average
The range is (0-509). The chances for a big NO are almost certain. The risk of you being the loan defaulters are the most in this case. If and only if someone offers you a loan, it will surely be at high-interest rates.
1- Make the payments on time and in a diligent manner.
2- Try to get new bank accounts. If you are approved for personal loans and credit cards will help your case positively for high credit scores.
3- Proofread your document details. If a mistake is found, get it done correctly by the experts.
4- Avoid making excessive credit inquiries.
5- Start making good relations with the experts of this field and ask them to teach the basics of remaining default-free as far as the financial dealings are concerned.
Is there a Minimum Credit Score
No there is not a specific limit. Almost every gets a loan in one way or another. Generally, people with not so good credit scores get loans at higher interest rates.
According to the range discussed above credits scores of 500 or below are not considered good.
The BIG money lenders might have created a limit line below which you could not qualify for loan gaining.
To be fair and clean in your dealings is the rule of good living. Irregularities must e avoided at any cost. The application for loans also gives greater importance to the fair dealings you have completed in your financial dealings.
To be highly eligible for getting loans at a lower interest rate you have to keep a closer look at your credit score and keep on working for its improvement.
If you have a good credit score and your application for a car loan is approved, before buying any car, visit QuickRevs that will help you in getting a brief history of the car you are going to buy.