How to keep your credit file healthy while moving home
Moving home is a huge process for any home owner, and you might find that the last thing on your mind is your Equifax credit report. But this next step in the property ladder could end up potentially damaging your file - unless you are take precautions.
Check out these possible scenarios that could end up harming your credit.
New mortgage, new repayments
You will likely find that your mortgage repayments have changed.
Depending on the portability of your loan, you may either be taking on a new commitment or refinancing your current one. In either case, you will likely find that your mortgage repayments have changed. Furthermore, if you do end a mortgage early, you may need to pay exit fees (though it is illegal to ask for these for any loans taken out after 1 July 20111) and/or pay lender's mortgage insurance on the new loan.
Factor these new costs into your budget, as you may find it affects your ability to keep to your new repayment schedule.
Keep your lender up to date
Moving home is as much a battle of bureaucracy as it is a question of finances. It can be easy to get swept up in the flood of things on your to-do list, but it is integral to remember to keep your lenders in the loop as to your new address.
Many new homes will not have the internet connected for a number of days if not weeks, so you cannot rely on this medium alone for lenders to contact you if something goes wrong. Make it as easy as possible for them to send you a physical letter to avoid issues further down the line.
Know your utility charges
Once you've settled into your new home, depending on how far you have moved, you might notice that you are using certain appliances more frequently. The hotter parts of the country might be pushing you to use more air conditioning, while the more humid areas of Australia could mean your dehumidifier is on overdrive.
According to the Australian Energy Market Commission, there could be hundreds of dollars of difference in your annual costs for utilities after moving between states2. If you find yourself unable to make these repayments, they could end up damaging your credit file. Keep this in mind and put a bit of buffer capital aside for this (and other) potential unexpected increase in costs.
Make sure this is all taken care of before making that big move, and you'll find yourself without a nasty surprise on your next Equifax credit report.
Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstance before acting on it, and where appropriate, seek professional advice from a finance professional such as an adviser.
1MoneySmart, Switching home loans.
2Australian Energy Market Commission, 2014 Residential Electricity Price Trends.