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Handle9

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#3402228 12-Aug-2025 20:01

gzt:
Handle9: Who cares? Credit rating is almost meaningless in New Zealand. It’s not the US where it actually matters.

Credit rating records seem to matter in NZ. Care to explain?

"Credit ratings" aren't used in New Zealand the way they are used in the US. When you apply for credit the things that actually matter are your current levels of debt, current applications for credit and your history of defaults.

You can have a wonderful credit rating and be declined lending because you have a high debt burden. You can also have no history of borrowing but easily get a mortgage or credit card because you have no debt or defaults.

Your credit history is important but the credit rating BS is largely data harvesting by credit rating companies wanting to sell your details to lenders.

gzt

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#3402233 12-Aug-2025 20:43

I'm getting it. All those factors are part of credit rating to me, in NZ. I think you're saying in USA there's an absolute headline rating and that rating is used exclusively to make lending decisions without any other data, in many cases.

MadEngineer

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#3402238 12-Aug-2025 20:58

Handle9:

gzt:
Handle9: Who cares? Credit rating is almost meaningless in New Zealand. It’s not the US where it actually matters.

Credit rating records seem to matter in NZ. Care to explain?

your current levels of debt, current applications for credit and your history of defaults.

To me as a Kiwi, whenever someone says "credit rating", it's exactly those things you've listed that we'd commonly describe as a "credit rating". Not some A or B or C grade that they may have a cardboard certificate with a shiny WOW YOU'RE AMAZING star on it.

Getting listed with baycorp = bad "credit rating".

You're not on Atlantis anymore, Duncan Idaho.

notesgnome

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#3402247 12-Aug-2025 21:46

So, I signed up to creditscore (run by Illion I believe).

According to them:

You have no judgments or bankruptcies on your report
You haven't missed any payments on your accounts
At least half of your credit accounts are secured credit
You don't have any defaults or repossessions on your report
You haven’t made any applications for credit in the past 6 months

As a result of this, my credit score has decreased by 14 points since January!

So it seems that not doing anything can be as bad as not doing bad things...

Handle9

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#3402250 12-Aug-2025 21:59

gzt: I'm getting it. All those factors are part of credit rating to me, in NZ. I think you're saying in USA there's an absolute headline rating and that rating is used exclusively to make lending decisions without any other data, in many cases.

The US concept of credit rating and your credit worthiness in New Zealand are two very different things.

The (IMO stupid) concept of building a credit rating by borrowing isn't really a thing in New Zealand. Just borrow sparingly and pay your bills on time and you are fine.

Eva888

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#3402447 13-Aug-2025 20:31

notesgnome:

So, I signed up to creditscore (run by Illion I believe).

According to them:

You have no judgments or bankruptcies on your report
You haven't missed any payments on your accounts
At least half of your credit accounts are secured credit
You don't have any defaults or repossessions on your report
You haven’t made any applications for credit in the past 6 months
As a result of this, my credit score has decreased by 14 points since January!

So it seems that not doing anything can be as bad as not doing bad things...

Years back after living overseas, on returning to NZ we decided to accept an offer from a door sales person to change our electricity provider. Shock when the salesman made a call, then turned to me and said you can’t join Mercury, you failed a credit check.

What? I was horrified. Asked them who they called and promptly rang the credit company next day and they said I had no credit history and that’s why I failed. I had also failed to be given a basic credit card I had randomly applied for at The Warehouse when they were running a door promotion and couldn’t understand why. I thought a freehold house and decent income was more than enough.

Then figured ok to boost my rating I will buy an appliance on credit over six months, even though I had the cash to buy it outright. Nope couldn't do that either…no credit rating. Since then have credit cards and no problems but am still very wary now about paying on time and even traffic tickets I just pay rather than argue.

An escalation to a collection agency will definitely have an impact, no matter if you are on the right side of reason.

mudguard

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#3402463 14-Aug-2025 07:20

notesgnome:

So it seems that not doing anything can be as bad as not doing bad things...

This is true. Way back I used to work in consumer finance (before a bank) and we'd have an example of someone with no debt, own home (we can't prove this) suddenly wanting a credit card or consumer finance and we'd turn them down simply as they had no history what so ever.

It sounds harsh but an old boss used to say, why do they want us now? As in, why do they need credit. Usually it would be someone on say a fixed income or it was not clear where the money came from (maybe didn't work, partner earned good money).

So it's a double edged sword. Think about your own situation and when would be the last time someone did a credit check on you. If you haven't moved in awhile, maybe own your own home and have had the mortgage with the same bank, you may not have had any credit inquiries in the last 7-10 years.

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