Geekzone: technology news, blogs, forums
Welcome Guest.
You haven't logged in yet. If you don't have an account you can register now.

539 posts

Ultimate Geek
+1 received by user: 19

Topic # 215021 8-Jun-2017 20:05
Send private message

Recently been advised by my mortgage broker that credit checks affect your score even if you have a very good spot free credit rating and have always pays your debts? Is that even possible?  Has anyone recently done a check before and after one of the recent credit checks?  Reason I am asking is that I am moving electricity provider and the new one wants to do a credit check which seems odd for small monthly electricity bill but it's their policy? Is their any harm in letting them do it. I have no problem with my credit history. Thanks

Create new topic
2382 posts

Uber Geek
+1 received by user: 856


  Reply # 1796913 8-Jun-2017 20:34
Send private message

 It definitely can. Everytime a credit check gets done on your name, it leaves an enquiry against your record. Typically the name of the company enquiring, and how much credit you are applying for. It is mainly patterns that are bad. Lots of enquiries from different moneylenders definitely looks bad. The occasional enquiry from a power company or an ISP shouldn't be a problem.


I can understand the power company's point of view in wanting a credit check. As if you get into arrears it can be a difficult process to get the power disconnected. As if you say that there is someone who is medically dependent on power living in your house..............


Other problem is the anti moneylaundering rules. lots of companies do credit checks now as part of their process of verifying ID.

2761 posts

Uber Geek
+1 received by user: 657

Lifetime subscriber

  Reply # 1796914 8-Jun-2017 20:34
Send private message

Yes the more credit checks done the lower your score can go.  What they do is count each credit check and the amount entered as that you have taken the credit offered by the party that is doing the check.




So lets say you are shopping around for a personal loan of 10k, you visit 5 place that each do a credit check, they then show this to other creditors you could may have taking out 5 x 10k loans.


Their systems need to be updated to say if the credit was taken, at this stage they don't do that.


Yes I know, it's dumb.  You shop around for the best interest rate deal and after trying a couple more places and going back to the first you might not get the same rate as your score has gone down.


I even know a few companies (GE money was one) that would not even tell you the interest rate they could offer until they did a credit check.





104 posts

Master Geek
+1 received by user: 40

  Reply # 1796915 8-Jun-2017 20:34
Send private message

Looks like there is some truth in that. From CreditSimple FAQ (D&B personal frontend):


Don’t make too many applications for credit
Having a lot of enquiries in a short timeframe is not a good thing. Typical behaviour such as a applying for a mortgage or the occasional personal loan or credit card are not necessarily bad, but if you’re constantly applying for small loans or have a lot of enquiries on your file within a short time period then this will negatively impact your score. Applying for a lot of credit cards within the last couple of years is not ideal.




I ran these checks for potential tenants and I usually only seen enquiries either from TINZ (tenant checks) or big telcos (mainly Telecom & Vodafone). Sometimes the loan companies or bank would enquire as well but I haven't seen any electricity retailer enquiry yet.



2572 posts

Uber Geek
+1 received by user: 342


  Reply # 1796916 8-Jun-2017 20:37
Send private message

I've been told credit checks can knock down a credit score. At the same time we are now in an age of positive credit reporting, eg I was looking at the other day and noticed Vodafone is now providing account conduct history which in turn can push the score upwards.



539 posts

Ultimate Geek
+1 received by user: 19

  Reply # 1796918 8-Jun-2017 20:38
Send private message

So what amount do power companies put when they do a credit check or do they need to?  So is it a good thing or bad to move power companies to save say $10-$15/month. Is it worth having a credit check for this type of saving?  I haven't had one in a long time, just one few weeks by the bank and then this one if I move. Apart from that last check would have been in 2014 I believe.

2761 posts

Uber Geek
+1 received by user: 657

Lifetime subscriber

  Reply # 1796923 8-Jun-2017 20:50
Send private message



So what amount do power companies put when they do a credit check or do they need to?  So is it a good thing or bad to move power companies to save say $10-$15/month. Is it worth having a credit check for this type of saving?  I haven't had one in a long time, just one few weeks by the bank and then this one if I move. Apart from that last check would have been in 2014 I believe.



It should be fine.


It would red flag more if you applied to a number of different companies all around the same time, i.e. power, internet, credit cards, personal loans (that screams out as someone has stolen someones ID).  Most people that do credit checks know that some companies do them for new accounts.


If you pay your bills on time, don't take out a lot loans etc the odd 1 or 2 credit checks a year is fine.




I have a feeling this is why some companies have also moved to their own "store credit cards" to get a better ID of customers and the credit they use rather than HP's that they use to do.  2 examples of this is GE money (they have sold off their old personal loans books etc) and the warehouse.



313 posts

Ultimate Geek
+1 received by user: 6

  Reply # 1798122 11-Jun-2017 17:47
Send private message

What you can do is to get your own copy of your credit reports from each of the three reporting agencies and the lenders may accept them. It doesn’t affect your score if you request the credit report yourself. Sometimes a bank enquiry will actually add around 8 points to  a credit score. They want to encourage lending. They don’t like you going to the competition for a better deal so they penalise you by making it look bad on your credit report. If you apply for actual lending on a credit card for example, you could lose anywhere between 30-70 points from your score. There is no certainty to the credit scoring system and a lot of factors come into play. Its unregulated so a credit score cannot be disputed either. Credit scoring does restrict freedom, just like debt does. My advice don’t borrow money from lenders who use credit scoring or credit reporting if you want to keep your credit report clean. I wish I had followed that advice and I might not be bankrupt today. Veda Advantage who do credit scoring are now owned by an American company called Equifax. Soon we will never be able to escape past wrongs, no matter where in the world we end up.


Some lenders will make a determination of how much interest they will charge you based on your credit score. The benefit of a credit score is really for the investors. The credit score is used to determine risk. The higher your credit score the more likely the chances are you will pay back your loan and not go into default. You are a low risk so you could potentially borrow money at a lower interest rate than someone who is a bad risk and who has a low credit score.


In two years my credit score went from 660 to below 400. One debt that is in default is listed twice, once by the bank and again by the debt collector. That lowers the score. Someone wrongly entered the amount of a credit card on my credit report and I lost more points than I should have.  Entries stay on a credit report for five years. Once they drop off you do gain back some points but never the same amount as what was originally deducted.


I went to a property seminar here in Chch and they talked a bit about credit reporting and said that if you have a credit score below 850 you may not get a mortgage. I haven’t been able to test that theory but I do know that some banks will not allow a person to even become a customer if their credit score is below a certain threshold.


Positive credit reporting – I can’t comment on that. Comprehensive reporting is whereby two years worth of repayment history are displayed on your credit report. On my credit report those transactions have never affected the credit score at all. Veda’s comprehensive credit reporting is such that even if you are one day late in paying it will show up as being late. Credit scoring ensures that past wrongs can never be truly escaped. In my opinion it’s a cruel and oppressive practise that does not benefit the consumer. If you’ve got a good credit score, then you will be an easy target for lenders.


Some things seem strange to us, but they are the result of well thought out strategies. Debt in any form is a huge profitable business and its that way by design.



29 posts

+1 received by user: 3

  Reply # 1798564 12-Jun-2017 15:29
Send private message

They definitely can, though apparently it depends on the kind of check (hard check vs soft). Via NZCU's loan post:


'No. Checking your credit file will not hurt your credit score. This is what’s often referred to as a ‘soft enquiry’, and has no detrimental effect on your credit score.'


If my experience is anything to go by, it'll depend on the kind of check your provider wants to carry out. Though chances are it'll probably be a hard check (which sucks!). As others have pointed out, though, the odd hard check shouldn't be too detrimental e.g. from the one provider. It's when you apply to a bunch of different places at once that things likely start to impact you negatively. Just something to keep in mind!

3786 posts

Uber Geek
+1 received by user: 1427

  Reply # 1798587 12-Jun-2017 15:56
One person supports this post
Send private message

The system needs to allow borrowers to shop around, without endangering their credit scores.  A cynical person might conclude it's deliberately set up to limit consumers benefiting from competition.


4952 posts

Uber Geek
+1 received by user: 1316


  Reply # 1798636 12-Jun-2017 16:50
Send private message

Why would they change? It's a sellers market.

Create new topic

Twitter »

Follow us to receive Twitter updates when new discussions are posted in our forums:

Follow us to receive Twitter updates when news items and blogs are posted in our frontpage:

Follow us to receive Twitter updates when tech item prices are listed in our price comparison site:

News »

Stuff Pix enters streaming video market
Posted 21-Mar-2018 09:18

Windows no longer Microsoft’s main focus
Posted 13-Mar-2018 07:47

Why phone makers are obsessed with cameras
Posted 11-Mar-2018 12:25

New Zealand Adopts International Open Data Charter
Posted 3-Mar-2018 12:48

Shipments tumble as NZ phone upgrades slow
Posted 2-Mar-2018 11:48

Oppo R11s: high-end Android, budget price
Posted 27-Feb-2018 16:27

Samsung New Zealand introducing the Galaxy S9 and S9+
Posted 26-Feb-2018 07:00

Fujifilm X beats its best with new top of the range, high-performance camera
Posted 24-Feb-2018 14:05

One million kiwis affected by cybercrime
Posted 24-Feb-2018 13:58

New Zealanders want to engage with government online and via mobile apps
Posted 24-Feb-2018 13:56

Samsung launches Samsung Max
Posted 24-Feb-2018 13:52

CPTPP text and National Interest Analysis released for public scrutiny
Posted 21-Feb-2018 19:43

Foodstuffs to trial digitised shopping trolleys
Posted 21-Feb-2018 18:27

2018: The year of zero-login, smart cars & the biometrics of things
Posted 21-Feb-2018 18:25

Intel reimagines data centre storage with new 3D NAND SSDs
Posted 16-Feb-2018 15:21

Geekzone Live »

Try automatic live updates from Geekzone directly in your browser, without refreshing the page, with Geekzone Live now.

Are you subscribed to our RSS feed? You can download the latest headlines and summaries from our stories directly to your computer or smartphone by using a feed reader.

Alternatively, you can receive a daily email with Geekzone updates.