Your credit score has become more important than ever.
In recent years, banks and lenders have placed greater emphasis on assessing your creditworthiness before approving any kind of finance, whether it’s a credit card, personal loan, or home loan.
When you apply for credit, the lender will access your credit report, which shows your score and a range of financial information that helps them understand your borrowing behavior.
Most people rarely think about their credit score or even know what it is, but it plays a big role in your financial future. It can affect everything from your ability to get approved for a home loan to the interest rate you’re offered.
A study by Credit Simple back in 2016 revealed that 92% of Kiwis didn’t know their credit score, and only 13% had ever requested their credit file. While that research is a few years old, chances are the numbers haven’t changed much.
What Is a Credit Score?
Your credit score is a number that summaries how well you manage your financial commitments. It helps lenders determine whether they can trust you to repay borrowed money — and on what terms.
In New Zealand, your score typically ranges from 0 to 1,000. The higher the number, the better you’re seen at managing your money and meeting your financial obligations.
Your score is based on your history with credit cards, loans, bills, and other accounts — essentially, it’s a snapshot of your financial reliability.
How Credit Scores Are Calculated
Your credit score is calculated by credit reporting agencies such as Centrix, Equifax, and Illion. Each uses slightly different scoring systems, but they all look at similar factors, including:
- How long you’ve had credit accounts open
- The number of credit enquiries made in the last few years
- How often you’ve moved addresses
- The number and type of accounts you hold
- Whether you’ve missed or been late on any payments
- Any defaults, court judgments, or bankruptcies
Paying your bills and loans on time has a positive impact, while missed payments, defaults, or unpaid debts can lower your score.
Does Your Credit Score Really Matter?
Absolutely, especially when you’re applying for a mortgage.
Banks are very particular when it comes to credit scores. If your score is low or you have a default (especially to another financial institution), a bank is more likely to decline your loan application.
That’s where non-bank lenders can make a difference. They tend to be more flexible with applicants who have a less-than-perfect credit history. However, the trade-off is often a higher interest rate or stricter conditions.
As mortgage advisers, we often work with non-bank lenders to help clients who may not yet qualify for a bank loan and once their credit score improves, we help refinance them back to a mainstream bank.
How to Check Your Credit Score in New Zealand
You can check your credit report for free with any of the three main credit reporting agencies:
All you need is some ID (like your NZ driver’s licence) and a few minutes online. It’s a great idea to check your report regularly to ensure everything listed is accurate. If something doesn’t look right, you can contact the agency to have it reviewed and corrected.
Can You Improve Your Credit Score?
Yes and you should.
Your credit score isn’t fixed forever. With time and consistent effort, you can improve it by:
- Paying bills and loans on time (or early if possible)
- Reducing debt and keeping credit card balances low
- Avoiding too many new credit applications at once
- Keeping older accounts open to show a longer credit history
Good credit habits today can make a big difference when you’re ready to apply for your next home loan.
At Mortgage Sense, we’ve helped many clients get back on track financially — even after being declined by their bank. We believe in helping people, not just writing loans. A strong credit score opens more doors, but smart guidance can open even more.
If you’re unsure where your credit stands or want help planning your next step toward homeownership, get in touch, we’ll help you make sense of it all.
