Frequently Asked Questions

Your credit file contains information about you and your credit activity over the past seven years, including:
Personal details such as name, residential addresses, date of birth, drivers licence number and current or previous employer
Credit applications and enquiries you have made during the past five years
Records of some current credit accounts
Overdue accounts (defaults) which have been listed against your name, including an indicator on whether the default amount has been paid or not
Bankruptcy information
Default judgements
Public record information

If you are applying for a home or business loan, it is a good idea to get a copy of your credit file prior to applying for a loan.  You apply for your credit profile online at http://mycreditfile.co.nz/  for minimal costs.  Obtaining a copy of your credit information file will assist you in understanding, assessing, and managing your own credit-worthiness. 

Pay bills on time.  An overdue account is usually a debt that has been owing for a minimum of 60 days.  Unpaid accounts will remain on the database for seven years. 
Call your credit provider(s) in a timely manner and alert them if there is a problem meeting your commitments.  
Review your credit file to make sure there are no errors in the information and/or discover any overdue accounts that have been forgotten about.
Monitor your credit file to ensure someone is not fraudulently using your identity.
Limit credit applications to necessary situations only.  Each new application is recorded on your credit file and too many applications, even for loan pre-approval, can be an issue for some lenders. 
Remember that the details of all overdue accounts, even when paid, remain on your file for seven years from the date of listing. 

Clearly maintaining a clean credit profile is very important as it demonstrates to a lender your capacity to honour agreements that you entered into and evidences a history of honouring such commitments. 

Your borrowing capacity is something you need to know before you commence your property search as it tells you how much you can spend on your new home and where you can afford to live. 
Your borrowing power will vary between banks and lenders because they use different methods to assess your capacity and have different lending criteria.  Many borrowers go a step further and give pre-approvals on their loans. 
Knowing your borrowing power or borrowing capacity is a good place to start when purchasing a property as it will give you an idea of how much you can afford to borrow.  Knowing how much you can afford to borrow will help you keep to your budget when searching for a property.  Use the calculators in order to get an estimate of your present borrowing capacity.
As a guideline, when determining how much you can borrow banks and lenders will look at:
Credit card limits
Income and types of Income e.g. casual, contract, full time
The size of the loan compared to the property value
Number of dependents and their situation
Type of loan
General living expenses, and
Existing asset position (including the size of your deposit)

Pay off and close any credit card or overdraft facilities
Do the sums and stick to a budget to improve your deposit and savings history
Pay off outstanding term debts (e.g. personal loans)