Why Having a Healthy Credit Report and Credit Score Matters?

Opening your first credit facility, such as a credit card or a car loan, represents the beginning of your credit history, which is why learning to be financially responsible from an early adult age is crucial.

Lenders have a responsibility to ensure you can meet your payment obligations before the granting of credit. A core element of successfully applying for new credit such as mortgages, loans or credit cards is a good credit history represented by a healthy Credit Report and Credit Score. This demonstrates you are financially responsible and likely to make your future credit payments on time.

Credit Score Impact: The Mortgage Application Scenario

The largest financial transaction you will most likely undertake during your working life is buying a house or an apartment, and it’s important you are able to afford the repayments on such a substantial financial loan.

When you approach lenders, they need to offer you an appropriate and affordable deal while making sure that their investment is protected. Although the mortgage will be secured against your property, you still need to demonstrate that you can afford to keep up the necessary repayments throughout the duration of the mortgage term.

Here’s how it works: Upon application, your lender will get your Credit Report and/or Credit Score from AECB. The information in your report allow the lender to assess the risk and make more informed decision before granting the mortgage.

Keeping Your Credit Report and Credit Score Healthy

The benefits of having both a healthy Credit Report and a high Credit Score extend beyond the binary ‘Yes/No’ decision and depends on the lender individual policies and risk appetite. With a high Credit Score, approval of your mortgage may be quicker, and the rates or charges applied to your offer could be more favourable, meaning your monthly repayment is lower.

If you have a regular income, it’s not difficult to maintain a healthy Credit Report and a high Credit Score. Keep on top of your financial responsibilities and stick to your commitments; repay your debts on time and successfully manage your financial obligations based on the terms outlined in any credit agreement you have.

Take Away: Helping you to be Credit Smart

Having a good credit history and making use of credit services has a positive effect on your creditworthiness.

Making payments on time, including utilities such as a phone, water or electricity bill, will enhance your Credit Report and improve your Credit Score.

A high Credit Score means that you are more likely to be successful when applying for core life changing credit products, such as your first mortgage.

  • Credit Report
  • Credit Score
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