Your credit score plays an important role when applying for a mortgage but it’s only one part of the bigger picture. You can make smarter financial decisions and improve your chances of approval if you understand how credit scores work.
What Is a Credit Score?
Your credit score is a rating given to you that shows your financial history.
Lenders use your credit score as a factor when assessing a loan application to determine the level of risk they would be taking on if they approved your loan.
Your credit score can impact how much you can borrow, or
which companies will lend to you, or
the interest you may be charged
However, credit score is not the only thing lenders consider whilst assessing your application. Additional areas lenders consider include the following:
your income,
assets,
debts, and
expenses
Fortunately, a bad credit score, although not desirable, doesn’t necessarily mean you can’t get a mortgage or loan.
How Is My Credit Score Determined?
The information in the credit report is used to calculate the credit score.
This can include:
Loan Repayments (timeousness)
Defaults
Utility bill payments
Frequency of credit applications
Types of lenders used
Change of address
Different credit reporting agencies calculate score differently, so your score may vary between provides.
How and Where Can I Get a Copy of My Credit Report?
There are three main companies in New Zealand that track your credit information. These are:
Equifax
Centrix and
illion
These are different companies, and therefore, each one does its own data management and calculations to determine your credit score. This means there is no ‘one source of truth’ for your credit score. There may be, and in fact are, actual score overlaps, which is illustrated in the table below.
It’s free to get a copy of your credit report, although there may be a charge if you need it urgently. To get access to your report, you can use Credit Simple (illion), My Credit File (Equifax), or go to Centrix’s main website.
Once you get your credit report you need to check it because errors may negatively impact the credit rating. If you find there is incorrect information in the credit report you will need to go to all three companies to get it fixed.
What Is a Good Credit Score?
Credit scores are between 0 and 1,000.
Zero being the worst possible score
1,000 the best at illion and Centrix, whilst Equifax best is 1200.
A score of 500 and above is generally considered “good”.
Instead of focusing only on the number, lenders consider overall credit conduct and financial stability.
How Long Does Credit Information Stay on Your Report?
This varies between agencies since they retain different types of information for different periods of time. Some information may remain for several years, depending on the type of listing and the agency involved. This means over time, positive financial conduct can gradually strengthen your profile as older negative events expire.
Who Has Access To My Credit Report?
Providers can ask for your permission to access your credit report. This is common practice when you:
Apply for a home loan or credit
Sign up with a utilities company (electricity, internet etc)
Apply for a job (especially if you have financial responsibilities)
Apply to rent a property
Your credit report can be provided without your permission to certain government agencies, debt collectors and in court proceedings against you.
How Do I Improve My Credit Rating?
Depending on the reason for your low score, here are some recommendations on how to improve your credit rating:
Firstly, check your credit report is correct. If it includes incorrect information, contact the credit report companies to get it fixed. If there are loans and credit checks you didn’t approve, you may be a victim of fraud. Consequently you would want to address this by reporting it to the authorities, and they will give you more information on what to do in that case.
Start building a good payment history by consistently paying your bills on time.
Pay down current debts as much as possible.
Avoid taking on unnecessary or additional debt.
Reduce the number of credit cards you have, as well as your credit card limits.
Your credit report is made up of data from the previous four years only. Therefore, over time you can build up a history of good financial behaviours while the history of negative ones drops off the record.
What If My Credit History Has Already Led To a Decline?
Your credit score is an important part of the lending assessment process, but it is only one piece of the overall picture. Lenders look at more than just one thing. They also consider income, expenses, assets and the structure of your application.
A lower credit score doesn’t automatically mean your borrowing journey is over. With the right strategy and lender selection, there may still be pathways available depending on your own circumstances.
If your mortgage application has been declined because of credit history, start with our guide on Why the Bank Said No.
If you’re specifically looking for mortgage options with credit challenges, you can review our Non Bank Lendingoptions.
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Angela is an accredited Financial Adviser, licensed under FSP742251 and has been in the Financial Industry since 2006. Our 5-star Google reviews reflect the excellent customer experience we promise — making your home loan journey positive, stress-free, and rewarding. At Platinum Mortgages, our clients are the reason we exist — so you can be confident every step is guided by genuine care and expertise.
