Your checks and credit applications
| Doesn’t affect your score | Can lower your score a little |
|---|---|
| Getting your own credit report or score | Applying for a credit card or loan |
| Quotes that don’t need a full credit check | Applying for a home loan |
| Your existing lenders’ reviews | Buy now pay later, phone and power applications |
Why the myth sticks
When a lender checks your credit because you’ve applied, the enquiry goes on your report, with the type of credit and sometimes the amount. Other lenders can see it. People mix that up with looking at their own report, which lenders don’t treat as an application.
How much does applying cost?
Each credit application is recorded on your report as an enquiry. One or two are normal. Many in a short time can suggest you’re under financial pressure and lower your score, especially if they were declined.
Ask before you apply. Many lenders and brokers can tell you whether you’re likely to be approved before running a full credit check. Then apply to the one you’ve chosen, rather than to several at once.
If you’re planning to buy a home, avoid new credit applications in the months before, such as a new card, a car loan or buy now, pay later. Banks see them, and a new limit can reduce how much you can borrow.
Why you should check
Checking regularly helps you spot mistakes and identity fraud early. You can get your report free from Centrix, Equifax and Experian: they must send it within 10 working days. Check all three, because they don’t always hold the same information.
When you read it, look for:
- Accounts you don’t recognise, which can be a sign someone is using your details.
- Late payments or defaults that are wrong, or that you’ve since paid.
- Enquiries you didn’t make.
Fixing a mistake
Ask the bureau to correct it, and tell the lender involved. If the bureau won’t fix it, you can complain to the Privacy Commissioner, who oversees the Credit Reporting Privacy Code. If someone has applied for credit in your name, ask all three bureaus to put a suppression on your report.
More on what does move your score: credit scores explained.