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.