​What is credit?

We explain the difference between debit and credit, how to manage credit and also what to do if you’re in financial difficulty.

Different types of credit

Credit can include:

  • personal loans and home loans

  • credit and store cards

  • education loans

  • hire purchases

  • short term or ‘pay day’ loans

  • a mobile phone

  • internet services

  • electricity or gas

  • water services.

Managing credit

When you agree to repay credit, you’re responsible for repaying the money you owe under the terms of any contract you make. This is true for both your mobile phone contract and a large debt like your home loan.

Before you borrow money and agree to a credit contract:

  • compare loans, credit cards, energy offers and other types of credit to get the most affordable deal

  •  work out the repayments before you agree to borrow money and make sure they fit into your budget

  • check your credit history by getting a credit report

  • read the contract, ask questions if you don’t understand it and get independent legal advice before you agree to anything substantial like a home loan.

If you’ve never borrowed money before, we recommend checking out MoneySmart’s Borrowing basics.

Once you’ve agreed to your credit contract (including utility and service contracts), it’s important to make repayments on time. If you don’t repay the credit as you’ve agreed there might be financial impacts such as late payment fees. It can also affect your credit record and future credit applications. Credit Smart have put together 12 Steps to maintain a healthy credit report.

When you apply for credit, get a mobile phone contract or agree to a contract with an energy company this information goes on your credit file and becomes part of your credit history.

 

Financial difficulty

If you’re struggling to meet your loan repayments or pay your bills, it’s always a good idea to contact your lender or service provider and let them know what’s happening. You may be eligible for hardship assistance or a repayment plan.

We understand that life can take unexpected turns. If you’re finding your loan or credit card repayments difficult to make we may be able to offer assistance when you need it most.

The best way to let us know about your situation is to contact NAB AssistFinancial Counselling Australia is a free, confidential service to assist people in financial difficulty. Financial counsellors are qualified professionals who can provide you with the information, support and advocacy to assist you with your financial situation.

Credit repair

If you’ve got a bad credit history it can be tempting to pay someone to help you fix it, but credit repair agencies may not always be able to do what they claim. In most cases, default listings and other historical information cannot be removed from your credit report unless they are proven to be wrong. ASIC’s Money Smart site has some helpful information on what credit repair companies can and can’t do.

Source: NAB https://www.nab.com.au/personal/life-moments/manage-money/money-basics/credit

Reproduced with permission of National Australia Bank (‘NAB’). This article was original published at hhttps://www.nab.com.au/personal/life-moments/manage-money/money-basics/credit

National Australia Bank Limited. ABN 12 004 044 937 AFSL and Australian Credit Licence 230686. The information contained in this article is intended to be of a general nature only. Any advice contained in this article has been prepared without taking into account your objectives, financial situation or needs. Before acting on any advice on this website, NAB recommends that you consider whether it is appropriate for your circumstances.

© 2021 National Australia Bank Limited (“NAB”). All rights reserved.

Important:
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

Share this post

Varsity Lakes

Phone:  07 5580 9489

Suite 1303, Lakeside 2, Bermuda Point, 1 Lake Orr Drive, Varsity Lakes, QLD 4227 

Email : [email protected]

Mailing Address:
PO Box 1040
Burleigh Heads QLD 4220

Mon - Fri: 8.30 am - 4.30 pm
Sat - Sun: Closed

Kirra

Phone: 07 55 361 301

60 Musgrave Street, 
Kirra QLD 4225


Email: [email protected]

Mailing Address:
PO Box 855,
Coolangatta QLD 4225

Mon - Fri: 8.30 am - 4.30 pm
Sat - Sun: Closed

Brisbane City

Phone: 07 3067 7960

Suite 3, Level 25 
215 Adelaide Street, Brisbane City QLD

Email : [email protected]

Mailing Address:
PO Box 845,
Brisbane QLD 4001

Mon - Fri: 8.30 am - 4.30 pm
Sat - Sun: Closed

Brisbane South

Phone:  07 3392 0077 

Level 1 Suite 2 4 Clunies Ross Ct, Eight Mile Plains Qld 4113 


Email : [email protected]

Mailing Address:
Suite 375, 7 Clunies Ross Ct, Eight Mile Plains QLD 4113.

Mon - Fri: 8.30 am - 4.30 pm
Sat - Sun: Closed