A healthy credit score can be the difference between securing a loan and being rejected, but many property investors don’t realise the little mistakes they’re making are having a big impact on their credit history.
Results from research house Experian show that 97 per cent of Australians are unaware of how damaging late payments are to credit scores.
“Fifty-six per cent of people know there will be an impact, while 97 per cent of people misunderstand how big the impact could be,” said ANZ general manager for credit services Tristan Taylor.
“What we’ve seen in the research is that your score could be impacted by up to 22 per cent in some cases if you miss one payment, but most people think it is far lower,” said Mr Taylor.
That drop increases to 26 per cent with two missed credit card repayments and 42 per cent for those with three or more missed credit card repayments in the last three months, he said.
There are many myths about credit that investors should be aware of to help their chances of securing finance.
- If I don’t use my credit card much, it’s not considered a liability by a lender.
- Getting a credit card can help improve a credit record.
- Being offered personal finance means you have a good credit score.
You can learn about how to improve your credit score in detail here.