How does Veda calculate our credit score?

4 replies

Michael Kao

Qantas - Qantas Frequent Flyer

Member since 06 Nov 2014

Total posts 148

How does Veda calculate our credit score?

I was surprised when I got rejected with my Amex application, and found out my Veda credit score was only average, with a "high risk of bankruptcy in 12 months".

I always pay my credit card bill on time in full balance. I have a permanent job with the government and my income is at the top 1%. I do have a few investment loans but that is for tax reduction purpose as I pay the highest tax rate, and many of my investment properties are actually positive gearing rather than negative.

I tried to search on this topic but most of it seem to be US based which doesn't apply to us. (Many of the blogger have >20 credit cards and credit score constantly >700! I doubt if we can do that.) I would really appreciate if anyone has any insight to this and advise me how I can improve my credit score.

riley

Virgin Australia - Velocity Rewards

Member since 19 Mar 2014

Total posts 358

I don't know how they arrive at their decisions but I do know you can dig deeper. You can request a copy of your rating. (I think they charge) and find out where the blips are. It may be something minor like an unpaid fine that you never received or a disputed phone bill?

I believe companies are more sensitive with things like credit cards and phones. Whereas properties, cars can enable them to lend to those with less than ideal ratings.

CBR boy

Member since 12 Feb 2015

Total posts 61

Riley is right about being able to request your credit rating file from Veda - and this is free if you have been declined credit. You can ask for any mistakes to be corrected , and then inspect the result for free, too.

There could be many reasons why you have an average score or are assessed as vulnerable to bankruptcy. Recent or multiple changes of job or residence, multiple credit applications, unpaid utility bills or fines, and having a high income but few assets are all potential negatives. I wonder also whether your mention of multiple investment properties may be relevant - perhaps the Veda scoring takes account of how financially stressed you might become if a proportion of the properties were suddenly untenanted? That's just speculative, though. 

hutch

Member since 07 Oct 2012

Total posts 762

Note that getting a copy of your credit file won't give you your Veda 'Credit Score'. It will tell you about defaults, current credit, applications and who has accessed your file etc. 

But in any case, we don't know what weight AMEX puts on different things when assessing applications. 

hutch

Member since 07 Oct 2012

Total posts 762

Also, apart from requesting your file after being turned down for credit, you can do so yearly for free. It's a good habit to get into. 

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