Protect your credit rating

Many people do not understand the long term effects of not paying their bills. Many companies refer unpaid accounts to a debt collection agency who collects the unpaid account on their behalf.

The debt collection agency passes this information on to a company who specialises in holding information on peoples past credit history.

Many countries have a place you can go to to find out what your credit rating is. In New Zealand you can go to www.mycreditfile.co.nz and download a form that you can post in to this company to request for free (as long as you are prepared to wait 10 days) what is held on your credit history. It also gives some interesting information about protection from identity theft as well.

When you request credit from a store or finance company that store or company then contacts this information company to find out what sort of credit risk you are.

If you want to borrow money in the future the long term effect of your having an amount referred to a collection agency could be that you have to pay more to borrow money than someone with a good credit history. This is because you are more of a risk to the lender. You could also be declined for something important such as a home or a business.

Some people don’t realise that even when goods have been repossessed and sold to help offset debts owing, that the person who took out the loan originally is still liable to pay the outstanding balance even when they may not have the goods any more.

Silbo Systems, conduct money lessons for parents together with their children in small groups. For information contact us