wez130

Hi, i did a search but the most recent thread related to this was from 2008! I guess a lot may have changed since then lol.

So, basically, what's the best way to build my credit rating when i arrive in NZ? We eventually would like to buy a house and want to be in the best possible position to do that, i understand that we'll almost definitely need a 20% deposit to buy anyway, so that'll take a year or so to have enough savings. Also, as we won't be able to bring our car from the UK, we'll need to buy another once there too, which we'd probably need to finance.

Thanks

Kotare

You might be better off buying a 'banger' initially - lots of reasonably good low cost ones out there. Kiwis are happy to drive 2-300km models with no loss of face (unlike Europe).

MrsFychan

no need for credit rating here, if you can show you have full time permanent work then all good

BEVS

There are assorted 'what you can borrow' calculators on the various bank websites. <---- click link.

It will be primarily based on your earnings , your outgoings & any debt you will have. So if you buy a vehicle on credit that will reduce what you can borrow.

escapedtonz

You don't need credit history from the UK or anywhere else for that matter. The banks etc just aren't interested. You'll just start all over again with a clean slate so to speak and they'll consider you, how much you earn, your outgoings and offer finance up to your affordability. They'll also consider the type of visa you are on, so for example if you are on a temporary visa for 5 years you will only get finance for the balance of years/months up to when your visa expires. If you are on a permanent visa then you should be ok to have a loan for any period you wish.

To build your credit here, I'd consider the little things that you wouldn't generally think as finance......
Mobile phone on a monthly contract.
Sky TV, house insurance, car insurance, energy account (gas / electric) etc. These are all finance agreements and will assist.

Clappy

In the UK there are credit rating agencies that track the amount of credit that you have available, the outstanding balances on them and whether you pay on time each month.

There are not the same things (at the moment) in NZ. When assessing you for credit they will take into account your income and outgoings but visa type will have an impact - anyone on a temporary visa will be considered a higher risk of non-payment.

I can't think of any specific must-do things here - for example being on the electoral roll in the UK is pretty much essential for getting credit there but it is not the same here. Providing three months of bank statements is the only thing I can remember having to do to get a mortgage here - but that mortgage was through my normal bank so they already knew a lot about me.

paddy234

You don't need 20% if your a first time buyer. We just bought house and land with only a 10% deposit. While my partner is Kiwi i have only been here 3 years and and was easily granted a mortgage. The bank will look at affordability as the key and over the course of a year or so if you are able to save a decent amount and show you are smart with your money and have a good expendable income the banks will be more than happy to lend. Also unless you are a Resident or Citizen you will need a significant deposit to buy a house here

Shirrom

I opened a westpac bank account. I pay into it over the coming months and activate when I move to NZ. They also offered me a credit card. Just need my job offer and passport and upto date current credit card statements. Seems straightforward.

MrsFychan

There are options the bank can give on the deposits as they have a certain amount of leeway, the fact that you only paid 10% doesn't mean it would be opened to others, being here 3 years and other criteria may well of been the factor as to why you got it.

I personally would not depend on the fact and always budget to have the 20%, if you don't need it then you at least have the money to get a smaller mortgage.

Timmy Chch

Paddy bought house and land and so outside the lvr restrictions so you can rely on less than 20% deposit. Signature homes even do a 5% deposit build package. Buying an existing house is a different ball game and 20% is almost certain (check out the 10% welcome home loan if you comply, kiwisaver for 3+ years hardest condition). The premiums you get charged if they do agree to less than 20% are pretty hefty

sr71

You can't build a credit score in NZ, the system only really works on negative reporting. As a new immigrant (or new credit customer) you have a perfect rating already.

You only get negative marks on your record by defaulting on debts and also they do stuff like check how many times you've applied for credit in the last 12 months.

Charismatic

There is a score actually on the top of your Veda report (0 or negative being terrible and 1000 being the highest score, default score is 500) but lenders ignore the score and look for any negative credit events (defaults etc.)

The reason there isn't many threads on this topic is it's mostly a non-issue. Factors like the type of visa you are on, duration of employment, type of employment contract, duration of residency, account conduct etc. are weighed much more heavily than credit reporting. As long as nothing negative shows up you'll clear that hurdle easily.

sr71

That's the thing, the credit score is a Veda invented product that they are pushing heavily - not something that companies have looked at in the past. Maybe it's popularity will increase, but I think credit providers will ignore it and look at the underlying traditional data.

Nice little earner in Aus/NZ for Veda if they make a few hundred thousand people paranoid about their credit score and get them paying subscription fees.