An expat's guide to building a credit history in Australia

Contributed by Bad Credit Car Loans, 11 April, 2016

If you're a recent arrival in Australia, you'll be pleased to know that you have zero credit history. That's a blessing but also a curse. Unlike some countries, Australia won't see you as a "bad credit" case. Banks and lenders treat you as uncharted territory, much like a newcomer into the world of finance and credit. If you're on a temporary visa (457 visa) you may have to rely on international bank accounts and credit cards – at first.

No credit history means you need time

If you have just arrived in Australia and have a job, you need the following:

 If you are renting, you need to demonstrate you are a low risk to potential landlords, such as previous rental references and copies of your passport and visa. Once you connect your utilities and purchase a mobile phone plan (a post-paid phone handset rental and usage contract) these actions alone create your credit history. If you pay your bills on time and in full each month or quarter, this will not place any black marks on your credit history. This creates points of identification that will help you gain access to finance and credit.

Credit cards and banking

Most financial providers won't approve you for a credit card straight away. In a year – perhaps even six months – you can approach banks and lenders if you have evidence of stable employment and Australian-issued points of identification.

Points of identification are government-approved items that prove your identity. Your birth certificate is 70 points, a driver's licence is typically 40 points, where other forms of ID such as a gas bill are worth 20 points. In most cases, a bank requires 100 points of ID before approving a credit card or bank account.

Some banks may conduct an overseas identity check before they allow you to open a bank account or apply for a credit card.

An alternative: prepaid credit cards

If you need to make payments with credit cards in the short term, you may purchase prepaid credit cards that work much the same way as a debit card. Prepaid credit cards are backed by the major credit providers (VISA and Mastercard), and many are reloadable when funds run out. This is handy for making payments that accept credit, although it does not build your credit history in the same way as a bank-issued credit card does. Indirectly, if you use a prepay credit card to pay your bills on time, this does positively affect your credit history.

Tags: Utilities | Australia | services | banking | insurance |



Articles Archive