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Keeping your Credit Score in Check · She's On The Money

0:00
Speaker 1: She's on the Money. She's on the Money.
0:23
Speaker 2: Hello, and welcome to She's on the Money, the podcast
0:26
Speaker 2: for millennials who want financial freedom. Now, there's one topic
0:30
Speaker 2: that comes up time and time again that people don't
0:32
Speaker 2: really seem to have an answer on, and that is
0:35
Speaker 2: credit scores.
0:35
Speaker 3: We have an answer on it, Boja, we do.
0:37
Speaker 4: We've got lots of But what are they? How do
0:41
Speaker 4: we figure out what ours is?
0:43
Speaker 2: And do they actually impact our ability to make those
0:46
Speaker 2: big purchases like a home. Yes, podcasts so far done,
0:50
Speaker 2: done and justin have a good life, have my friend's day.
0:54
Speaker 4: Just kidding.
0:55
Speaker 2: My name is Georgia King and joining me to get
0:58
Speaker 2: to the bottom of things today. Of course, financial advisor
1:02
Speaker 2: Victoria Divine v.
1:03
Speaker 4: What is a credit score? Let's start at the start.
1:07
Speaker 3: Let's start at the very makes sense. Yep, all right,
1:09
Speaker 3: so g a credit score or a credit rating. These
1:11
Speaker 3: two things are actually interchangeable, so that's the same thing.
1:15
Speaker 3: But some people don't know that, so let's clarify that
1:18
Speaker 3: at the start. So essentially, lend is going to use
1:20
Speaker 3: that to figure out if you're going to be eligible
1:22
Speaker 3: for a home loan, a car loan, or a personal loan.
1:24
Speaker 3: And it is a history of all the money you've
1:27
Speaker 3: borrowed and all the money that you've had owed in
1:30
Speaker 3: your life. So your credit score is based on information
1:33
Speaker 3: that is in your credit report, and that's basically if
1:35
Speaker 3: you've ever applied for a credit card before, or any
1:38
Speaker 3: type of loan, or had any type of finance agreement historically,
1:43
Speaker 3: so that'll be on there. And the important thing about
1:46
Speaker 3: that credit report as well, it's not just if you
1:49
Speaker 3: got the credit or not. So say you g decided,
1:52
Speaker 3: oh I don't want a personal loan, want to go
1:54
Speaker 3: on a holiday, and you went to a whole heap
1:56
Speaker 3: of banks and applied for a personal loan with them,
1:59
Speaker 3: All of those in inquiries are going to be on
2:01
Speaker 3: your credit report, including the one that you got. And
2:05
Speaker 3: I think it's a misconception that some people are like, oh,
2:08
Speaker 3: it doesn't matter, like I never actually got the loan,
2:10
Speaker 3: Like your inquiry for credit is going to be on
2:13
Speaker 3: that report, and that can negatively impact your credit score
2:17
Speaker 3: because that makes you look a bit kind of flaky. Yeah,
2:19
Speaker 3: it makes you look flaky, but it also is a
2:21
Speaker 3: bit of a concern because they'll go, well, gee, why
2:24
Speaker 3: did you go to the Bank of Melbourne and apply
2:26
Speaker 3: for a personal loan and then not get it. Did
2:28
Speaker 3: they not approve you? What's going on? What do they
2:30
Speaker 3: know that we don't know? And then they look into
2:33
Speaker 3: that further. So for me, it's just really important to
2:36
Speaker 3: understand what your credit report is to begin with, and
2:39
Speaker 3: we'll get to it, and there are a whole heap
2:40
Speaker 3: of ways to find out what your credit score is.
2:43
Speaker 3: But back to explaining exactly what it is. So, your
2:45
Speaker 3: credit score is a number, and it sits between zero
2:47
Speaker 3: and on thy or twelve hundred, depending on the credit
2:49
Speaker 3: reporting agency that you're going to be using, and the
2:52
Speaker 3: higher the score, the less risk a lender season lending
2:55
Speaker 3: you money, and you're likely to get a better deal.
2:57
Speaker 3: So we want high credit score, gotcha. We want it
2:59
Speaker 3: to be as close to one thousand or as close
3:02
Speaker 3: to twelve hundred as physically possible. And their score is
3:05
Speaker 3: on a five point scale, so you're either going to
3:08
Speaker 3: be excellent, very good, good, average, or below average, and
3:12
Speaker 3: we don't want to be sitting on the lower end
3:14
Speaker 3: of that scale. Excellent and very good, I would say,
3:17
Speaker 3: in the same realm, So we don't want to slip
3:20
Speaker 3: any further down than that though.
3:22
Speaker 4: Okay, So how do we find out if we are excellent,
3:25
Speaker 4: very good?
3:26
Speaker 3: So there are lots of places to find out your
3:28
Speaker 3: credit score, and you guys are probably stumbled across a
3:31
Speaker 3: number of them, and it's actually super easy to understand
3:34
Speaker 3: your credit score. You can find out what your credit
3:36
Speaker 3: score is from any online credit provider, and there's a
3:39
Speaker 3: thread in our Facebook group with lots of different websites.
3:41
Speaker 3: You're able to search credit score and it'll just pop
3:43
Speaker 3: up what we recommend, and it should be free and
3:46
Speaker 3: pretty fast. The important thing to note here, though, is
3:49
Speaker 3: we want to do a soft check, not a hard check.
3:52
Speaker 3: So there's a difference between the two of these, and
3:55
Speaker 3: I don't want to get too technical, but a hard
3:57
Speaker 3: credit check is essentially the type of che you do
4:00
Speaker 3: when you're applying for finance, So a bank will go
4:03
Speaker 3: in and fully review everything and it will go on
4:06
Speaker 3: your credit score, whereas a soft check is you just going, hey,
4:09
Speaker 3: can you give me the number in a quick update
4:11
Speaker 3: on what's going on? And you can get that from
4:13
Speaker 3: a number of places. So there's a place called Experion,
4:17
Speaker 3: there is Equifax. If you google free credit score check,
4:21
Speaker 3: the first couple are going to help you in saying
4:24
Speaker 3: that we'll link some in the show notes and our
4:26
Speaker 3: friends that wise up. This is not sponsored with They're
4:29
Speaker 3: just good Eggs. They actually have a free credit check
4:32
Speaker 3: tool on their website that I quite like does the
4:34
Speaker 3: same thing. It's just a little bit more aesthetically poleasing
4:39
Speaker 3: all for that.
4:40
Speaker 4: Okay, so credit score does? Do you need a credit card?
4:45
Speaker 2: No?
4:47
Speaker 3: Like shut it down, shut it down down, shut it down,
4:50
Speaker 3: put it in the bin, put it on fire like
4:52
Speaker 3: twenty twenty, which was a dumpster fire. Yeah I miss
4:55
Speaker 3: I miss those vibes.
4:56
Speaker 4: Gee, bring them back.
4:57
Speaker 3: But no, you do not need a credit card to
5:01
Speaker 3: create a credit score. You might have heard this before though,
5:05
Speaker 3: because in America you do so. In America they're all
5:09
Speaker 3: about building your credit history, and your credit history helps
5:13
Speaker 3: create your credit score, which the more credit you've had
5:16
Speaker 3: and the better you are at paying it back. It's
5:18
Speaker 3: kind of like, you know, improving it and going to
5:20
Speaker 3: university and getting good grades and you come out with
5:22
Speaker 3: a really good outcome so that they go, oh, well,
5:24
Speaker 3: she's a HD because look she's done all of this
5:27
Speaker 3: work and she gets it. In Australia, it is different.
5:30
Speaker 3: The credit score that you have by default usually starts
5:34
Speaker 3: really well and things like you paying your phone bill
5:37
Speaker 3: on time and not going into debt and paying your
5:40
Speaker 3: electricity and your water bills on time are going to
5:44
Speaker 3: contribute to you having a good credit score. In saying
5:47
Speaker 3: that a credit card doesn't necessarily impact you negatively, but
5:50
Speaker 3: it can very easily because if you miss a payment
5:53
Speaker 3: or a crew any interest, like, you're not going to
5:56
Speaker 3: be seen as someone who is really good at money
5:58
Speaker 3: management because you're borrowing it for someone else.
6:00
Speaker 4: Yeah.
6:01
Speaker 3: Right, So if you've got a credit card, yeah, okay,
6:04
Speaker 3: that might be great. You might have it for points
6:05
Speaker 3: and a whole heap of other reasons. But if you're
6:08
Speaker 3: going to get a home loan, that's going to come
6:10
Speaker 3: up on your credit report and they're going to say, hey, gee,
6:13
Speaker 3: I saw that you have a credit card and you go, yeah,
6:15
Speaker 3: no problems, and they'll go do you owe anything on it?
6:17
Speaker 3: And you go no, no, no, I'm really good at
6:19
Speaker 3: my credit card and they go, okay, cool, we don't
6:21
Speaker 3: care about that. How much is the limit and you'll go, oh,
6:24
Speaker 3: it's a ten thousand dollar limit, and then they'll go, oh, okay,
6:28
Speaker 3: no problems, dee. We'll just knock down your ability to
6:30
Speaker 3: lend by ten thousand dollars and you're going, what but
6:34
Speaker 3: I have nothing owing and they go, yeah, yeah, It's
6:36
Speaker 3: actually not about what you owe, it's about what you've
6:38
Speaker 3: got access to. And so that's why a lot of
6:41
Speaker 3: brokers will give you the recommendation to get rid of
6:44
Speaker 3: credit cards if you are going for a loan if
6:47
Speaker 3: you don't need them, or knock down their limits significantly.
6:51
Speaker 3: So I even did this recently. When I was purchasing
6:54
Speaker 3: my home. I took a credit card that I had
6:57
Speaker 3: that I think had like a six thousand dollar limit,
6:59
Speaker 3: and I had it because of business, and the reason
7:01
Speaker 3: I had it. I don't actually use it. I just
7:04
Speaker 3: was one of those things that I had for work,
7:06
Speaker 3: and it was really helpful in the moment. In fact,
7:09
Speaker 3: i've now shut it down, but I stripped it back
7:12
Speaker 3: completely to be a five hundred dollar limit, and I
7:14
Speaker 3: was like, you know what, I want to keep it
7:16
Speaker 3: just in case, but like just slip it back. I
7:18
Speaker 3: had some direct debits on there that I just didn't
7:20
Speaker 3: want to have to change. So instead of having that
7:23
Speaker 3: six thousand dollar limit, I called up and said, Hey,
7:25
Speaker 3: what's the lowest I can go on this credit card?
7:28
Speaker 3: Like with the limit and they said, oh, five hundred,
7:30
Speaker 3: And I said, can I knock it back to that
7:31
Speaker 3: gol on the phone? Super confused, She's like why, And
7:34
Speaker 3: I was like, I don't want to cancel the card,
7:36
Speaker 3: but I also don't need it impacting my ability to
7:38
Speaker 3: lend money from a bank. She was like, oh, okay,
7:40
Speaker 3: no problems, Like she didn't seem to know what I
7:42
Speaker 3: was talking about, which, to be honest, is a bit concerning.
7:46
Speaker 3: But that is something that people run into trouble with
7:49
Speaker 3: when they say, oh, I want to go and get
7:51
Speaker 3: a home loan. They don't realize that just having a
7:54
Speaker 3: credit card actually impacts how much you can borrow. Why
7:58
Speaker 3: is that?
7:59
Speaker 4: So when you do you go and I don't know,
8:01
Speaker 4: do you apply for a credit card?
8:03
Speaker 2: I had? So will they tell you that straight up
8:07
Speaker 2: that this potentially why would they do that? Yeah, you're right,
8:10
Speaker 2: it's not in their best interest you ah damn credit
8:14
Speaker 2: card companies. But do you know what I was actually
8:16
Speaker 2: very confused about, and this is probably not a good
8:18
Speaker 2: thing to share, but you know what, we're open, We're
8:20
Speaker 2: a family here.
8:21
Speaker 4: Yeah.
8:22
Speaker 3: I was shocked at how easy it was to get
8:24
Speaker 3: that credit card.
8:26
Speaker 4: Okay, So I went.
8:27
Speaker 3: And got it or what like just over twelve months
8:30
Speaker 3: ago for work stuff, I needed one because like whatever
8:34
Speaker 3: supplier I was buying from would only accept credit card
8:37
Speaker 3: because they were overseas and all of this other stuff.
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Speaker 3: And I talk often about how it's really important to
8:43
Speaker 3: not rely on credit cards, and you know, there is
8:45
Speaker 3: actually no excuse, and in my book I talk about
8:47
Speaker 3: all of the myths that you don't need one for,
8:49
Speaker 3: And to be honest, it was just me taking the
8:51
Speaker 3: easy option out. I wasn't trying to go, Okay, cool,
8:55
Speaker 3: well I need one, but I've told everybody else you don't.
8:57
Speaker 3: I'm sure there was a work around. I'm sure I
8:59
Speaker 3: could have like asked them for bank deposits or whatever.
9:01
Speaker 3: It just in that moment, because I was buying from
9:04
Speaker 3: an overseas supplier, it felt a lot safer to have
9:06
Speaker 3: a credit card in between, because I didn't really know them. Anyway.
9:09
Speaker 3: You're welcome for the notebooks that are coming to the
9:11
Speaker 3: shees on the money website, But applying for it, I
9:15
Speaker 3: was like, oh, this will take ages, like this might
9:17
Speaker 3: not be worth it. Went on the website, filled in
9:20
Speaker 3: all of my details. I approved immediately, and they said,
9:22
Speaker 3: your card's going to be sent out in X amount
9:25
Speaker 3: of days, and.
9:26
Speaker 4: What the devil?
9:27
Speaker 3: Yeah, Like, obviously I have an income and I, you know,
9:30
Speaker 3: am good with money, so didn't have a bad credit
9:32
Speaker 3: score or whatever. Maybe that contributed to it, but just like,
9:35
Speaker 3: the hurdle to get a credit card was terrifyingly low,
9:39
Speaker 3: and I remember being like, surely that's not it, Like
9:42
Speaker 3: because they just got me to upload a copy of
9:44
Speaker 3: my driver's license, which is obviously really easy. It's twenty
9:46
Speaker 3: twenty one, so you just like snap it on your phone.
9:48
Speaker 3: And I was like, what, that's it. No one called me,
9:52
Speaker 3: no one spoke to me, and then three days.
9:53
Speaker 4: Later my mailbox interaction.
9:55
Speaker 3: Three days later, in my mailbox, I had a credit
9:58
Speaker 3: card that I could have slipped into a lot of debt.
10:00
Speaker 3: I'm not saying I did. Obviously I don't even have
10:02
Speaker 3: that credit card anymore. But I was like, what the devil.
10:05
Speaker 2: I'm there pretty tight regulations around credit cards these days
10:09
Speaker 2: that after paying stuff don't have to subscribe.
10:12
Speaker 3: To Yeah, so we'll get into that, I think in
10:14
Speaker 3: an entirely different episode, because there's a whole range of
10:18
Speaker 3: stuff going on at the moment that I am personally
10:21
Speaker 3: not very comfortable with. But I kind of did it
10:24
Speaker 3: as like a little test, because you know, I always
10:26
Speaker 3: talk about credit cards and how easy they are to get,
10:28
Speaker 3: and I was kind of like, as much as I
10:30
Speaker 3: could have done something else, I was like, Okay, you
10:32
Speaker 3: know what, I'll just do this and see what happens.
10:34
Speaker 3: And like, obviously I know money better than the average bear,
10:37
Speaker 3: I would say, And yeah, I was still shocked that,
10:41
Speaker 3: after the Royal Commission, after you know, the responsible lending
10:43
Speaker 3: laws have come in, that it was so easy. And
10:45
Speaker 3: I mean, I'm personally what people would call a clean skin,
10:49
Speaker 3: like I don't have any bad debt. You know, I
10:50
Speaker 3: don't have any bad credit history. I've had a personal
10:53
Speaker 3: loan historically, which you guys know about. But you know,
10:56
Speaker 3: I was an easy target. But like, imagine if I
11:00
Speaker 3: was going through a rough time and really needed that,
11:02
Speaker 3: I could have easily gone from being what a lender
11:04
Speaker 3: refers to as a clean skin, which is somebody that's
11:07
Speaker 3: really easy to lend you because they've got no bad
11:09
Speaker 3: credit history, to somebody who has six thousand dollars worth
11:12
Speaker 3: of credit card debt essentially overnight. Like anyway, that's my ranch. No,
11:16
Speaker 3: I love we're talking about credit scores, not Victoria's credit
11:19
Speaker 3: card tests.
11:21
Speaker 2: Okay, well, back to credit scores then, thank youth, And
11:24
Speaker 2: on the home loan chat that we were kind of
11:26
Speaker 2: having before. Ye, So if you have a bad credit score,
11:29
Speaker 2: does that mean that you're less likely to be able
11:31
Speaker 2: to be a proof for a homeland?
11:33
Speaker 3: Yes. And the reason is because the credit score is
11:36
Speaker 3: essentially like saying, hey, is Georgie a good person to
11:39
Speaker 3: lend money to? And they'll go, oh, let's check her
11:42
Speaker 3: credit score and see what her history is like. And
11:44
Speaker 3: they'll go, oh, she didn't pay back the water company,
11:48
Speaker 3: she skips her phone bill consistently. Oh, we don't feel
11:53
Speaker 3: that comfortable giving her a home loan because we just
11:55
Speaker 3: don't feel like she, you know, is a responsible person
11:58
Speaker 3: and is actually going to pay that back. So for them,
12:02
Speaker 3: it's actually just them doing their due diligence and going,
12:04
Speaker 3: is you a dry good person to lend to? And
12:06
Speaker 3: then your credit score is essentially saying, oh, she's a
12:09
Speaker 3: bit riskier than this other person. That's again what the
12:12
Speaker 3: lenders call a clean skin and a good person to
12:15
Speaker 3: lend to. They'll go, yeah, just say no to Georgery
12:17
Speaker 3: and give it to somebody else, and That's why for
12:20
Speaker 3: a lot of people who have a bad credit history,
12:23
Speaker 3: it's very hard to secure a home loan. They might
12:26
Speaker 3: have more than twenty percent in savings in their accounts,
12:29
Speaker 3: they might have no personal debt, but their history says
12:32
Speaker 3: that they're not a good person to lend to. So
12:35
Speaker 3: they've got to work really hard to one get over
12:37
Speaker 3: that and create good credit history. And the way, you know,
12:40
Speaker 3: we'll get into that. I'm sure you're gonna ask me
12:42
Speaker 3: how do we get a better credit more soon? But
12:45
Speaker 3: there are a number of strategies and ways that you
12:47
Speaker 3: can build your credit score back up. But it can
12:49
Speaker 3: be really disheartening. And the reason it can be really
12:52
Speaker 3: disheartening is because too many people don't think about their
12:54
Speaker 3: credit scores early enough, Like it's not something that you
12:57
Speaker 3: consider until you're actually talking to the broker, right, why
13:01
Speaker 3: would you.
13:01
Speaker 2: Look into it totally? And I think people dismiss them.
13:04
Speaker 2: And I've seen this in our group quite a bit
13:06
Speaker 2: because they're like, that's an American thing, it doesn't matter.
13:08
Speaker 2: They look at your savings, your income and all of
13:11
Speaker 2: that jag, but not necessarily your credit score. So what
13:14
Speaker 2: I'm hearing is that it actually is a bigger deal.
13:17
Speaker 3: It's a big deal because it's reflective of whether you're
13:20
Speaker 3: a good person to lend to or not. And furthering
13:22
Speaker 3: on on that conversation, a lot of people this this
13:26
Speaker 3: is going to sound really dramatic, and I don't mean
13:28
Speaker 3: it to sound dramatic, but we're talking about money on
13:30
Speaker 3: a money podcast. I know people who have been so
13:34
Speaker 3: excited they've been saving for their first home and then
13:36
Speaker 3: they go to borrow money, and they go to the bank,
13:38
Speaker 3: and then they find out that somebody else has fraudulently
13:41
Speaker 3: used their identity and on their credit history are things
13:45
Speaker 3: that aren't actually related to them, And that is why
13:48
Speaker 3: we need to be on top of our credit score
13:51
Speaker 3: and understand exactly what that is like. G do you
13:55
Speaker 3: know if there's anything a miss on your credit history
13:58
Speaker 3: right now? I would have no idea exactly. So that
14:00
Speaker 3: is why we need to just go and check, even
14:02
Speaker 3: if we're not planning on purchasing at any point in
14:05
Speaker 3: the future. It's also a really good indicator of any
14:09
Speaker 3: loans that have been taken out in your name. Unfortunately,
14:12
Speaker 3: we had a money diarist recently who was telling us
14:15
Speaker 3: about how her partner had left her with a whole
14:17
Speaker 3: heap of debt and that came up on her credit
14:20
Speaker 3: score because they had taken out a whole heap of
14:23
Speaker 3: loans in her name, and while she kind of knew
14:26
Speaker 3: what it was, she didn't know the volume of it
14:28
Speaker 3: until she saw, oh, what do you mean, there's a
14:31
Speaker 3: loan with X bank? Like I didn't know about that
14:33
Speaker 3: one either, and then had to contact them and say, hey, like,
14:37
Speaker 3: man named Victoria, I'm a client of yours, but I
14:40
Speaker 3: don't know And essentially it was in her name. It
14:43
Speaker 3: looked like there had been forged signatures, and it's an
14:45
Speaker 3: absolute circus. But it's not just people stealing your identity
14:50
Speaker 3: who are overseas doing this. It's actually quite common in
14:54
Speaker 3: financially abusive relationships for a partner to apply for credit
14:57
Speaker 3: in your name. And it's just a good idea, just
15:00
Speaker 3: little bit of a check up. It's like financial hygiene.
15:03
Speaker 3: I'm not saying check every ten minutes or every month,
15:05
Speaker 3: but like every couple of years. I would have a look,
15:08
Speaker 3: like I would recommend maybe once a year, like don't
15:11
Speaker 3: do it too often because it's not necessary and you know,
15:15
Speaker 3: we don't want to go overboard, but like just be
15:18
Speaker 3: in check you know, maybe new financial year, new you
15:21
Speaker 3: check in on your finances.
15:23
Speaker 2: Love it so b If you have been the subject
15:26
Speaker 2: of that kind of fraud, or you've had an abusive
15:29
Speaker 2: partner who has taken advantage of your credit score and
15:32
Speaker 2: it's plummeted, can you resolve that and fix that?
15:35
Speaker 3: Yeah?
15:36
Speaker 4: Okay, good, Look, there's two ways about it.
15:38
Speaker 3: Like, at the end of the day, if let's use
15:40
Speaker 3: an example, someone took out a ten thousand dollars personal
15:43
Speaker 3: loan in your name, G and all of the documentation
15:46
Speaker 3: says it was you. The first thing I would do
15:48
Speaker 3: is call the bank and have a chat to whatever
15:51
Speaker 3: Lenda that was, whoever it was, and just be honest, Hey,
15:54
Speaker 3: I don't know about this. I don't know what it
15:56
Speaker 3: is or what's going on, and they're going to step
15:58
Speaker 3: you through their process. I'm not saying they going to
16:00
Speaker 3: wipe the debt and it'll all be well and good like.
16:02
Speaker 3: Unfortunately that's not the case for ninety nine percent of people,
16:06
Speaker 3: but most banks are really understanding because it's actually a
16:09
Speaker 3: lapse of judgment on their behalf as well. Yeah, because
16:12
Speaker 3: that loan has gone out and you're saying that you
16:14
Speaker 3: didn't do that that's fraudulent. Activity like that is ajailable.
16:18
Speaker 3: Events like that is fraud. And so they're going to
16:22
Speaker 3: take that accusation pretty seriously and work out with you
16:25
Speaker 3: how that works and what's going on. And if you
16:28
Speaker 3: have something on your credit score that you're very worried
16:31
Speaker 3: about and you're not sure what to do, our friends
16:33
Speaker 3: at the National Debt Helpline are geniuses at this. They
16:37
Speaker 3: know exactly what to do, who to talk to, where
16:39
Speaker 3: to go for every single different situation. So if that
16:43
Speaker 3: is you call them, talk to them. They are going
16:46
Speaker 3: to help you in a way that goes beyond anything
16:49
Speaker 3: a podcast can teach you. So go chat to them
16:53
Speaker 3: and remember that they're nice humans and I feel like
16:55
Speaker 3: we took about them a lot in podcasts. It's not
16:57
Speaker 3: sponsored again, they're just good Eggs, good.
17:00
Speaker 2: Things, Great egg So we will link that website in
17:03
Speaker 2: the show notes. And the number, just to jot it
17:05
Speaker 2: in here now is one eight hundred zero zero seven
17:08
Speaker 2: zero zero seven.
17:09
Speaker 3: I always remember that off the top of my head
17:11
Speaker 3: because it's like one eight hundred bond bond exactly. Yeah,
17:15
Speaker 3: like they're gonna save.
17:16
Speaker 4: You a bond.
17:19
Speaker 2: Alrighty, So back to the home loan thing v On
17:22
Speaker 2: the flip side of that, if you don't have a
17:25
Speaker 2: strong credit score, because maybe you've never had a credit card,
17:30
Speaker 2: or you haven't taken many loans, like you don't have
17:32
Speaker 2: a very big history of being seen to be responsible
17:35
Speaker 2: with money because you just haven't really touched loans or
17:38
Speaker 2: anything like that. Does will that hinder my ability to
17:42
Speaker 2: buy property?
17:43
Speaker 3: No? So yes and no. But it's twenty twenty one.
17:46
Speaker 3: Who doesn't have a phone, who doesn't have a mobile bill?
17:51
Speaker 4: I can't think of anyone.
17:52
Speaker 3: Yeah, exactly, So I think that it is pretty uncommon
17:55
Speaker 3: for people to have an entirely clear credit history, unless
17:58
Speaker 3: your parents still pay for your phone, in which case
18:01
Speaker 3: it's a good idea to start just getting a few
18:03
Speaker 3: things in your name. I'm not saying go into credit.
18:05
Speaker 3: We're not talking about personal loans, but having things like
18:08
Speaker 3: the electricity bill in your name as much as it
18:10
Speaker 3: is a responsibility, especially if you're in a sharehouse, like,
18:14
Speaker 3: nobody wants the electricity bill in their name, right, They
18:16
Speaker 3: all want the other people to have that in their name,
18:18
Speaker 3: and I'll pay you like, but it's your responsibility, right
18:21
Speaker 3: that can actually pay off over the long term. But
18:24
Speaker 3: flip side, of that. If you're going to take the
18:26
Speaker 3: responsibility of having the electricity bill in your name for
18:29
Speaker 3: your sharehouse and people aren't paying you, that could negatively
18:32
Speaker 3: impact your credit score and that is not fair on you.
18:35
Speaker 3: If you're late on payments because your housemates didn't pay
18:39
Speaker 3: and therefore you've waited to pay, does that make sense.
18:41
Speaker 3: So we need to be on top of these things
18:44
Speaker 3: and actually understand what it means long term for us.
18:47
Speaker 3: But at the same time, if you're like cool, like
18:49
Speaker 3: I'm moving in with Gking, I'm going to have the
18:51
Speaker 3: electricity bill in my name, it's not a bad thing.
18:53
Speaker 3: In fact, it's going to help me build my credit
18:55
Speaker 3: score a little bit.
18:57
Speaker 2: So basically, what you're saying here is I don't need
18:59
Speaker 2: a credit card, because you do hear that as well.
19:01
Speaker 2: You hear people saying you need a credit card to
19:02
Speaker 2: get because you need okay call no, let's shut that.
19:05
Speaker 3: If you take anything from this, it is that you
19:08
Speaker 3: do not need a credit card to get a home loan.
19:11
Speaker 3: In fact, it hinders you more than it helps. You
19:14
Speaker 3: do the right thing. Pay your bills on time, pay
19:17
Speaker 3: your phone bill, don't go into debt, and your credit
19:21
Speaker 3: score is going to look delightful.
19:23
Speaker 4: A strong message to head to the break with.
19:25
Speaker 2: I think after the break we will be hearing our
19:28
Speaker 2: community is most pressing at credit score questions as well.
19:31
Speaker 4: So please, guys, do not go anywhere nowhere, come back
19:34
Speaker 4: after this.
19:44
Speaker 2: Alrighty guys, please remember as well that conversations like the
19:47
Speaker 2: one we're having about credit scores, they happen every day
19:50
Speaker 2: on our brooming Facebook page, and there's one hundred and
19:53
Speaker 2: eighty one thousand of us.
19:54
Speaker 3: Now we have so many friends we are allowed to
19:56
Speaker 3: just consider them friends. They are friends, yeah, No, and
19:59
Speaker 3: I know they are friends, but like so many people
20:01
Speaker 3: will be like Victoria, Well people in a Facebook group
20:04
Speaker 3: you had, but it's mine.
20:06
Speaker 2: But you recently turned thirty, you had to postpone your party,
20:10
Speaker 2: so maybe disappointing. Maybe you could extend the invite to
20:12
Speaker 2: the one hundred and eighty one thousand people in the
20:14
Speaker 2: Facebook group if they are your true friends, you know
20:15
Speaker 2: what I'm saying.
20:16
Speaker 3: Yeah, but if you guys are my true friends, you'll
20:18
Speaker 3: understand that that's not in my budget. Respect. Can you
20:23
Speaker 3: imagine I can have a webinara or something?
20:26
Speaker 4: How many people go to music festivals?
20:29
Speaker 3: I don't know. I'm literally, I'm not a music festival person.
20:33
Speaker 3: I would have no idea what I can't tell by
20:36
Speaker 3: the pearls.
20:39
Speaker 2: Yeah, okay, So the moral of that story was join
20:42
Speaker 2: us on Facebook, Instagram, TikTok because.
20:46
Speaker 3: That Victoria will not be having a birthday.
20:49
Speaker 4: Shut it down.
20:51
Speaker 2: Okay, back to things Vicky day. Joanna from the group
20:54
Speaker 2: said that she's heard it's a good idea to check
20:56
Speaker 2: your credit score once a year. You did mention this earlier,
20:59
Speaker 2: so you would agree.
21:00
Speaker 3: Well, I mean, what did I say earlier?
21:02
Speaker 4: Yeah, so scrap that question. You answered it earlier.
21:05
Speaker 3: It's so good, But.
21:06
Speaker 4: Why would a good time?
21:08
Speaker 3: Checking once a year is a really good plan. We
21:10
Speaker 3: don't want to look at it all the time because
21:11
Speaker 3: it's not overly helpful for our mental health. But it's
21:14
Speaker 3: also not overly helpful because it's not going to change
21:16
Speaker 3: day to day. But once a year or so is
21:19
Speaker 3: a pretty good idea to make sure that you are
21:21
Speaker 3: on track and nothing is a ry.
21:23
Speaker 4: Okay, cool, cool, cool, She's lost the plot now.
21:31
Speaker 2: There was also a bit of chat in the group
21:32
Speaker 2: about how checking your credit report could potentially worsen your
21:36
Speaker 2: credit score.
21:37
Speaker 4: You mentioned this before when you were talking about hard
21:39
Speaker 4: inquiries and soft inquirs.
21:41
Speaker 3: Back to another episode of myth Busters. No, it's a myth.
21:46
Speaker 3: So checking your credit report doesn't worse in your credit score.
21:49
Speaker 3: As I said before, there are some good ways to
21:51
Speaker 3: check it and some bad ways to check it. And
21:53
Speaker 3: as we mentioned with there's the soft check and then
21:56
Speaker 3: the hard check. We don't want to be doing the
21:57
Speaker 3: hard checks. But if you go to our Wiser again
22:01
Speaker 3: not sponsored, just good and it's one of those things
22:03
Speaker 3: where we're working with all these people that I genuinely
22:07
Speaker 3: want to promote and like because they're trustworthy and safe,
22:10
Speaker 3: and so I'll continue to do that. But if you
22:12
Speaker 3: head to the Wiser website, their credit score checker is
22:15
Speaker 3: a free credit checker, and it's a soft credit checker.
22:19
Speaker 3: So you're going to be okay, but don't feel like
22:21
Speaker 3: checking it is going to make you look suspicious. If anything,
22:24
Speaker 3: it makes you look like you're on top of your
22:26
Speaker 3: finances and not burying your head in the sand.
22:28
Speaker 4: Okay, good to know, Good to know.
22:31
Speaker 2: And now it's a question that I think a lot
22:33
Speaker 2: of people in our group have been waiting for.
22:36
Speaker 3: Yeah, okay, So the nail color I use is a
22:39
Speaker 3: bubble buff by OPI is that.
22:41
Speaker 2: It show me you're wearing it? Now, I can't say anything.
22:45
Speaker 2: Is that not just your natural nail? No?
22:47
Speaker 4: Of course not.
22:48
Speaker 3: Okay, carry on, what was the real question?
22:50
Speaker 4: So the real question fun It was funny, It wasn't funny.
22:54
Speaker 3: No, No, you're all right, dog, I'm a comedian. Watch
22:57
Speaker 3: out Tony Lodge.
23:00
Speaker 4: Island.
23:00
Speaker 2: From our group, she did raise this question as well,
23:03
Speaker 2: how do we go about improving our credit score if
23:06
Speaker 2: it is a little down in the dumps.
23:08
Speaker 3: If your credit score is not looking that sexy, there
23:12
Speaker 3: are a number of things that you can do. First
23:14
Speaker 3: is stop panicking, stop stressing. It can be recovered and
23:17
Speaker 3: it can go back to good. It does take a
23:19
Speaker 3: bit of work, though, So first is understanding why your
23:22
Speaker 3: credit score is not good and getting rid of the
23:25
Speaker 3: reason it is not good. So, if it's personal debt
23:28
Speaker 3: that's not being paid off, let's have a look at that.
23:30
Speaker 3: It can be really confronting to do these things. But
23:33
Speaker 3: if you've got a personal loan that you can't seem
23:35
Speaker 3: to get on top of, the first thing you need
23:36
Speaker 3: to do is call that company and have a chat
23:39
Speaker 3: about renegotiating that loan, or have a chat with our
23:42
Speaker 3: friends at the National Debt Helpline about how you can
23:45
Speaker 3: get on top of that, because there's no point doing
23:48
Speaker 3: other things to increase your credit score. If you've still
23:50
Speaker 3: got this, you know, big elephant in the cupboard? Is
23:53
Speaker 3: that a good analogy? I don't know.
23:55
Speaker 2: I think it's in the room, but it would be
23:58
Speaker 2: absurd if you had a big elephant in the cup
24:00
Speaker 2: It's like a skeleton in the closet.
24:02
Speaker 3: Yeah, that's what I meant, a skeleton in the closet,
24:05
Speaker 3: but I.
24:05
Speaker 4: Merged those elephant in the I like it.
24:09
Speaker 3: Yeah, But if you've got an elephant in the cupboard,
24:11
Speaker 3: like specially get it right.
24:13
Speaker 4: Well you can, but it's not going to be easy.
24:15
Speaker 3: It's not can you how BIG's your cupboard? G King's
24:19
Speaker 3: reach guys. But if there isn't anything like that, you
24:22
Speaker 3: can do a few things. So pay your bills on
24:24
Speaker 3: time or your loans on time, and consider something If
24:27
Speaker 3: you're not that good at remembering, that's okay, use something
24:30
Speaker 3: like b pay for bill payment or set up direct
24:32
Speaker 3: debits so that you avoid any type of late fees.
24:35
Speaker 3: And if you can't pay your bills or loans on time,
24:37
Speaker 3: as I said before, talk to your credit provider, talk
24:41
Speaker 3: to National Debt Helpline, talk to someone about it. Don't
24:45
Speaker 3: just bury your head in the sand and not do
24:46
Speaker 3: anything about it. The second is keep on top of it,
24:49
Speaker 3: so check your credit score often. Again annually is a
24:52
Speaker 3: great place to start. It is the start of July
24:55
Speaker 3: at the moment, guys, if you're listening to this podcast
24:58
Speaker 3: on the day that it came out, but start of July,
25:01
Speaker 3: why not new financial year we do a check. Why
25:03
Speaker 3: doesn't that become the norm? Okay, new financial year has started?
25:06
Speaker 3: What are the things I need to do. I'm going
25:07
Speaker 3: to check in with my budget. I'm going to check
25:09
Speaker 3: in with my credit score. I'm going to check in
25:11
Speaker 3: with any loans I have to make sure I'm on
25:13
Speaker 3: top of it. I'm going to check in with any
25:15
Speaker 3: insurances to make sure I'm getting the best possible deal.
25:18
Speaker 3: Like now could be the best time to set yourself
25:21
Speaker 3: up for the next twelve financial months, which I think
25:23
Speaker 3: is really fun. Maybe I get excited about that, you
25:26
Speaker 3: get extra excited, but I do it's very fun. The
25:29
Speaker 3: next is avoid applying for multiple loans in a short
25:32
Speaker 3: period of time. Like I said before, if you've got
25:34
Speaker 3: a loan that you want to get. Don't go to
25:36
Speaker 3: lots of providers and apply for loans with all of
25:39
Speaker 3: them and then hope that you get one. Like that's
25:42
Speaker 3: like going fishing and hoping you get something back, but
25:45
Speaker 3: you've lost all of the rods. Like that's a really
25:47
Speaker 3: bad analogy of.
25:51
Speaker 4: What a wrong. I hate it when I go fishing
25:54
Speaker 4: in then I lose all the rods. It's the worst.
25:58
Speaker 4: I don't even know fishing. I think that is quite obvious.
26:05
Speaker 3: Oh no, But essentially a waid applying for multiple loans
26:08
Speaker 3: in a short period of time, because that is an
26:11
Speaker 3: indicator of financial stress and reliance on credit. And then, last,
26:16
Speaker 3: but not least, remember to let your lenders know if
26:18
Speaker 3: you move home or get a new email address, and
26:21
Speaker 3: keep all of your information and contact details up to date.
26:25
Speaker 3: That's really important because if something happens, like you have
26:28
Speaker 3: an overdue debt or you know they weren't able to
26:30
Speaker 3: debit your account for some reason, you're the first to
26:32
Speaker 3: hear about it and you actually can amend it before
26:35
Speaker 3: it impacts your credit score.
26:37
Speaker 2: That's all for me and my very weird ted took
26:40
Speaker 2: loved it, loved it all. Okay, so how long does
26:43
Speaker 2: it take roughly to improve a credit score. It's different
26:48
Speaker 2: for every book, Okay, Like sometimes there are a few
26:50
Speaker 2: things that you can do. And I do know that
26:52
Speaker 2: if something is on your credit score and it shouldn't
26:54
Speaker 2: be on there at all, there is a way to
26:56
Speaker 2: get rid of it. You need to talk again to
26:58
Speaker 2: the National Debt Helpline or to your credit provider or
27:00
Speaker 2: the person who did it so that they can completely
27:02
Speaker 2: eraise that history for you, and that could significantly increase it.
27:06
Speaker 2: But again, it could take a couple of months to
27:09
Speaker 2: just get back on track. For other people it might
27:11
Speaker 2: take a couple of years, just depending on the severity
27:14
Speaker 2: of their credit score.
27:16
Speaker 4: Okay, so check in now. Basically if you are.
27:19
Speaker 3: Just be on top of it. My friends, like, we
27:21
Speaker 3: don't need to do anything other than check and just
27:24
Speaker 3: make sure our housekeeping is done properly.
27:27
Speaker 2: And I can imagine it would be tempting not to
27:29
Speaker 2: look if you might be a bit scared, but just
27:31
Speaker 2: face it, get it done, rip that band aid off again,
27:34
Speaker 2: create a plan from there.
27:35
Speaker 3: Not knowing is not helpful, like not knowing doesn't give
27:38
Speaker 3: you any power. Knowing it's not great, like you don't
27:41
Speaker 3: have to share it with anyone you could check and
27:43
Speaker 3: then tell everybody else you didn't check. But just be
27:45
Speaker 3: aware of what it is because that is going to
27:48
Speaker 3: help you in the future. Like if future you really
27:50
Speaker 3: wants to buy a house, go and check your credit
27:52
Speaker 3: score to make sure that when they do go to
27:54
Speaker 3: do that, there's no nasty surprises.
27:57
Speaker 4: Okay, perfect, I think that is a great place to
27:59
Speaker 4: leave it for today. V. I'd like to agree, Gking,
28:02
Speaker 4: you'd like to agree.
28:03
Speaker 2: Just I guess the final little message is again, if
28:05
Speaker 2: you are feeling overwhelmed, do head to the National Debt
28:08
Speaker 2: helpline linked in our show notes.
28:09
Speaker 4: But V, let's leave it.
28:11
Speaker 3: There all right, But just before we head off, we'd
28:13
Speaker 3: like to acknowledge and pay respect to Australia's Aboriginal and
28:16
Speaker 3: Torres Strait islander peoples. They're the traditional custodians of the lands,
28:20
Speaker 3: the waterways and the skies all across Australia. We thank
28:23
Speaker 3: you for sharing and for caring for the land on
28:25
Speaker 3: which we are able to learn. We pay respects to
28:27
Speaker 3: eldest past and present, and we share our friendship and
28:30
Speaker 3: our kindness.
28:31
Speaker 2: And the advice shared on She's on the money is
28:33
Speaker 2: general in nature and does not consider your individual circumstances.
28:37
Speaker 4: She's on the money.
28:38
Speaker 2: Exists purely for educational purposes and should not be relied
28:41
Speaker 2: upon to make an investment or a financial decision. And
28:44
Speaker 2: we promise Victoria devirone is an authorized representative of Australia
28:48
Speaker 2: Pacific Funds Management Proprietary Limited ABN three four one through
28:52
Speaker 2: two four six three AT two five seven AFSL three
28:54
Speaker 2: three nine one five one. And remember, guys, if you
28:58
Speaker 2: do have any big elephants in your cupboard, release them.
29:03
Speaker 4: That's not a safe place.
29:05
Speaker 3: It's not a safe place to keep elephant weeks. That's
29:12
Speaker 3: not a safe thing.