What is a credit score and why you should care?

Your credit score is a number from 0 – 1,000 used to describe your credit history. It is a numerical expression of your full credit history and represents your creditworthiness as an individual.

Credit scores are a useful guide for credit providers or credit bureaus (e.g. banks, utilities, telcos and other lenders) for assessing your credit, and also can help you determine how you stack up. They often use credit scores to help determine whether to provide you credit, or an on-account plan.

How do credit scores work?

Credit scores take into consideration a number of factors including your length of credit history (how long you have operated credit accounts), payment history performance (how well you have maintained your required repayments), types of credit (such as secured or unsecured lines of credit), current amount owed and if there are any defaults or insolvencies reported.

If you have an outstanding debt, it will be reported to each of the three New Zealand credit reporting agencies: Centrix, Equifax, and Illion. These credit reporting agencies calculate your credit report. These credit reporting agencies will be notified of late payments, defaults (payments that are more than 30 days past due), bankruptcies, and any contact you may have with a debt collection agency.

How are credit scores applied to your application for credit?

Increasingly, credit providers use credit scores to help determine how much credit to provide you, and also what interest rate to charge you. This means the higher your credit score, the higher personal loan limits you can access, and the lower the interest rate.

How to access your credit score

At Nectar, we think it important for you to know what your credit score is, and to be able to access helpful information about credit scores and how to improve them.

You can access your current credit score by using this free credit check tool. Understand if you have a good credit record today.

Getting started with Nectar

Happy with your credit score and keen to apply for a personal loan? You can get started with Nectar and receive a loan quote, including your interest rate, maximum borrowing amount and repayment options in minutes. Borrow better, faster today! 

*Nectar’s lending criteria and responsible lending checks apply.