Why you have no credit history yet
Three credit reporters, Centrix, Equifax and Experian (formerly illion), keep a credit report on you: your credit accounts and their limits, your repayment history, any defaults and court judgments. Each can turn it into a score.
Under comprehensive credit reporting, your report shows good behaviour too: whether you made each monthly payment. If you’ve never had credit, there’s nothing to show yet, and lenders can’t tell how you’d handle it. A debit card doesn’t help: it spends your own money.
Step 1: Check your credit report free
You can ask each credit reporter for your report. They must reply within 10 working days, free. If you want it within 3 working days, they can charge up to $10. The three don’t always hold the same information, so ask all three.
Step 2: Your first credit
- A low-limit credit card in your name, used for one small regular bill and paid in full each month.
- A small loan, such as for a car, if you need one anyway, repaid on time.
- Power, phone and broadband accounts in your name. They can appear on your report, so pay them on time.
One account, managed well, is enough to start. Keep the limit low: when you apply for a home loan, banks count your whole card limit, even if you owe nothing on it.
Step 3: Repay on time, every time
- Set up a direct debit for at least the minimum, or the full balance.
- Never let a bill go to collection. A debt of $125 or more, at least 30 days overdue, that the lender has asked you to pay can be listed as a default for five years.
How long things stay on your report
- Repayment history: two years.
- Credit applications: five years from when you applied.
- Defaults: five years from the date of the default.
- Court judgments: five years.
- Bankruptcy: four years from discharge. More than one bankruptcy stays indefinitely.
If someone uses your details
If you think you’re a victim of fraud, ask each credit reporter to suppress your credit information. While it’s suppressed, they can’t share it in the usual way, which makes it much harder for anyone to get credit in your name. See how to spot money scams.
Mistakes to avoid
- Missing repayments. Each one shows in your repayment history for two years.
- Applying for lots of credit. Each application stays on your report for five years.
- Ignoring an overdue bill. A default stays for five years, even after you pay it.
Learn more
See credit scores in NZ for what affects your score, deposit and debt-to-income rules for how card limits affect a home loan, and how to make a budget so you can repay on time.