Your credit rating can affect more than just your ability to borrow money. It may be considered when you apply for finance, a credit card, a phone account, utilities, or even a future rental property. It gives organisations a picture of how you have managed financial commitments in the past.
Many people do not think about their credit rating until they need it. By then, unpaid debts, defaults, missed payments, or errors on a credit report can create problems.
For tenants, this is especially important.
Rent is one of your most important regular payments. Keeping your rent paid on time helps protect your rental history and shows that you can meet your obligations. Unpaid rent,
water charges, tenant damage, or other amounts left owing at the end of a tenancy can become a debt.
If that debt remains unpaid, it may be referred to a debt collection agency. This can affect your credit rating and may follow you for years. That can make it harder to secure another rental property, obtain finance, set up accounts, or buy a home in the future.
You may be renting now and enjoying the freedom that comes with that stage of life, but circumstances change. People grow up, partner up, start families, change jobs, and decide they want to buy their own home. When that time comes, you do not want unpaid debt from your younger self making life harder for your future self.
It is also worth checking your credit report from time to time, so you understand what information is being held about you. In New Zealand, you are entitled to request a copy of your credit report from agencies such as Centrix, Equifax, or Illion. If something is incorrect, you can ask for it to be investigated and corrected.
The best approach is simple. Pay rent on time, deal with bills before they become overdue, and speak up early if you are having difficulty. If you are struggling to pay rent or other tenancy-related costs, contact your property manager as soon as possible. Ignoring the issue will not make it go away. In many cases, a realistic repayment arrangement may be considered, but it needs to be agreed to and followed.
A good credit history and a good rental history are both valuable.
Protect them.Back