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A good credit score is a key that unlocks many portals to access the best financial products. Just as your behaviour expresses your character, your credit score reveals your financial potential to lenders. That’s why credit scores are one of the most defining factors that are taken into account by any lender during credit transactions. Check your credit score in NZ here.
What is a good credit score in New Zealand?
A credit score is a FICO report information-based prediction of your ability to make timely loan payments. The credit scoring model considers various factors, such as payment history and credit utilization from your present and past credit accounts.
When you apply for, whether it’s a loan or a credit card, a lender always looks at your credit score. And a good score helps you qualify for different loan offers at better terms, lower interest rates, and affordable fees.
Every lender has its requirements for their products on what credit score is good. In New Zealand, credit scores are typically measured on a scale of 0 to 1,000 or 0 to 1,200, depending on the credit reporting agency. The higher the score, the better your credit rating and the lower your credit risk.
Here’s a breakdown of credit score ranges, based on three major credit bureaus in New Zealand:
| Credit Score Range | illion score via Credit Simple | Equifax | Centrix |
| Excellent | 800 – 1000 | 833 – 1200 | 846 – 1000 |
| Very good | 700 – 799 | 726 – 832 | 769 – 845 |
| Average | 500 – 699 | 622 – 725 | 650 – 768 |
| Fair | 300 – 499 | 510 – 621 | 495 – 649 |
| Low | 0 – 299 | 0 – 509 | 0 – 494 |
How is credit score calculated in NZ?
Some top factors that can affect your credit score in New Zealand (NZ):
- ✅ Payment history: Late or missed payments impact your credit score negatively, while on-time payments can help improve it.
- ✅ Credit utilization: How much credit amount you’re using compared to your credit limit? High credit utilization impact negatively, while low utilization improves the credit score.
- ✅ Length of credit history: The longer you’ve had credit, the more it will help your credit score.
- ✅ Types of credit used: Lenders like to see credit mix; this shows how you manage different types of credit responsibly.
- ✅ Recent credit inquiries: Applying for too much credit at once can negatively impact your credit score.
Why does a good credit score matter?
These three-digit numbers are known as credit scores. Every credit bureau has a file with your credit report information, but your scores may be varied. A better credit score allows you to choose from a broader range of options; that’s the bottom line.
This score tells lenders and credit card issuers whether it is worth it for them to take a risk with you. But a low score does not mean you cannot get loan or card approval. Instead, your interest rate may be costly, and the terms stricter than with a good credit score.
Three Key Advantages of a good credit score in NZ:
- Higher credit limits
- Potentially lower interest rates
- More purchasing and negotiating power
How to get free credit score report online in NZ?
In New Zealand, there are three main credit bureaus that provide credit scores: illion, Equifax, and Centrix. Here are the steps to check your credit score in New Zealand:
- Choose a Credit Bureau: Select one of the three major credit bureaus mentioned above to obtain your credit score.
- Request a Credit Report: Request a credit report, typically done online or by mail.
- Verify Your Identity: The credit bureau verifies you by identifying your personal information, such as your full name, date of birth, and address.
- Review Your Credit Report: Receive a copy of your credit report, and review it for errors. You can dispute any errors with the responsible credit bureau if you find any errors.
By regularly monitoring, you can stay up on your creditworthiness and make improvements as needed to maintain a good credit score.
Why is my FICO score so low?
A bad credit rating is only sometimes the result of late or missed payments, negative notation, or bankruptcy. In many cases, having little or no credit history can also lead to a lower score.
Credit can also ‘fall’ from your report if you have not had any activity on your credit record for an extended period. There must be some activity in the credit report, such as no updates from the creditor for your old account. Your record automatically disappears from your FICO report if agencies have been waiting to receive updates for a long time.
Similarly, if your address or contact needs to be updated with the credit bureaus, you are considered a risky borrower even after no fault.
How to increase credit score quickly in NZ?
There are many ways to improve bad credit or fair credit gradually; take these steps to start building good credit:
- Regular monitoring and cleaning up your credit report.
- Paying down your debt balance.
- Pay twice a month.
- Increasing your credit limit.
- Opening a new account to keep credit utilization low.
- Negotiate with lenders or creditors on the outstanding balance.
- Pay in full each month on time.
- Don’t open too many accounts at once.
You can read our detailed article on How To Improve Credit Score NZ (2023)?
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