Credit score: Why it could be the difference when applying for a loan

Australians’ credit scores have always been under a microscope, but the pandemic has only added to the scrutiny.

The scores are key to borrowers proving their reliability when applying for loans – and given banks have tightened their lending criteria, having a good credit score can make or break a life-changing deal.

But more often than not, they are misunderstood.

So, what is a credit score? And how can a good one help you buy a forever home, or new car?

What is a credit score  – and what is it used for?

A credit score or ‘credit rating’ is a snapshot of financial behaviour that tells lenders whether a borrower can be trusted to service their debts.

Depending on the credit reporting agency, people are given a score between zero and 1000 or zero and 1200.

Essentially, the higher the number, the more trustworthy a customer is considered in the eyes of their bank or credit provider.

Continue reading about the difference a good credit score could make when applying for a loan.

First published on www.thenewdaily.com.au and republished with permission from The New Daily. For the full article visit The New Daily website.