Let’s talk about a common myth, and this came from some questions raised at a training I did with some young adults who are looking to get their first home.
This common myth is that “I need to have a credit rating before I can apply for my home loan”. A lot of young young adults are told by their parents they need to go and get a credit card so that they can build this credit rating. This is a really common myth.
And what you’ll find is if you have your own telecom, so you’ve got your mobile bill in your own name, then you may already have a credit file.
If you’re using Afterpay or Zip pay( not that I recommend any of them), then you may also have your own credit file, because all these things are checking your credit and building your credit file for you. The other thing I warn you is if you do go and get a credit card just to build your credit file, it can sometimes get you into more trouble than it can help.
For example, if you were to get, say, a ten thousand dollar credit limit and then use it all the way up and not pay it out, then you’re actually going to be paying a lot of money in interest. And if you miss any payments, then that is going to affect your credit history as well in a negative way.
The first step I would encourage you to do is get a copy of your credit score, your credit file, and you can do this through Equifax, I’ll pop the link below so that you can find it. But you get one free credit check per year so you can have a look and see if you already have a history and what that history might already look like. And if you’ve got any questions, you’re more than welcome to either book a free Zoom appointment with me or just give me a call and have a chat – https://calendly.com/360mortgagesolutions/video-conference