A credit score represents the creditworthiness of an individual. Here at TMCU, we take cautionary measures to ensure we accurately calculate member’s credit scores. So how exactly are they calculated, and what does your credit score mean for you? Read along to find out.
How are credit scores calculated?
A credit score is calculated from a credit report which is compiled via Equifax, a credit reporting agency. Once TMCU has been provided with adequate financial information, the lenders will run a credit report, where the member’s credit score will be determined.
The credit score itself is based on how many previous credit inquiries that an individual has applied for. Ultimately, the more enquiries, the less credible an applicant becomes. Inquiries can vary from loan applications, credit history and use of credit lines such as Zippay!
How can you improve your credit score?
So how can you improve your credit score? TMCU’s Senior Operations Officer, Greg Arvanitakis, advises that you should “avoid excessively applying for credit at multiple financial institutions”. Furthermore, applying for unsecured credit (such as credit cards, personal loans and so on) will impact your credit score far greater than applying for secured credit (such mortgages, car loans).
You can also ensure you maintain a satisfactory credit score by:
• Make loan repayments on time
• Carefully consider before applying for credit
• Pay-off any remaining debt
• Don’t make irrational loan applications until you are sure you are satisfied with the financial institution and your financial means
• Avoid use of ‘pay day lenders’
In doing so, you can keep your credit inquiries to an essential minimum and avoid credit score defaults and/or court judgement.
To find out more, speak to one of our friendly loans service staff at loans@transportmutual.com.au or (02) 8202 8555