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Hands up if you believe that worrisome old generalisation that women are bad with money?
It’s alright, you’re not alone. But you should know that this traditional view is changing. And, what’s more, a new survey by leading credit score provider Credit Simple has smashed all the old stereotypes.
Using the actual data of 25 million Australians, the recently published 2019 Credit Simple ‘State of the Nation’ report found that women have higher credit ratings than men in almost every state, city and region in Australia!
This is despite the gender pay gap which means that on average, women earn a lot less than men, the common attitude that women have little or no financial acumen, as well as the fact that many women often end up spending several years or more working less than full-time to meet family commitments.
The report found women have a score of 796, compared to only 778 for men.
But interestingly, the survey also showed that despite the fact that women had higher scores, they’re less confident than men when it comes to managing money.
“Generally, I think we can take from this report that women are taking more control of their money…
They’re learning, and adhering to, the basics of budgeting. They’re developing a strong understanding of how credit, loans and investments work and how to use these to their advantage,” says Julie Nipperess, of Step Up Financial Planning Group in Orange.
“The other consideration, certainly in my experience, is that women tend to be a bit more conservative than men when it comes to taking risks with their money. This factor could also be reflected in the outcomes here. It could also mean that women are more open to getting professional help when it comes to managing their money.
There are some unknowns in these survey results, but overall I think the results are very encouraging,” says Julie.
Comprehensive Credit Card Reporting was introduced to Australia a few years ago. It means that now more than ever, it’s really important to have a good track record of repaying your debt, because a bad credit rating can affect your chances of borrowing in the future.
“On the flip side, if you have a good credit rating, you will be in a better position to negotiate a better deal on things like home loans, credit cards, insurance policies and so on,” says Julie.
Credit scores are determined by a number of factors such as payment defaults and how often you’ve applied for credit. Your age can also be a determinant – because younger Aussies have had less chance to build up a score, theirs tend to be lower.
Your credit score is a rating from 0-1000. The higher the number, the better your creditworthiness.
You can check your credit score through companies such as Credit Simple. According to the company, more than 60% of Australians don’t know their individual score.
“The good thing about knowing your score is that you can improve it,” says Julie.
“Paying bills on time, keeping your credit card debt low, by not applying for too many loans, and my personal favourite, budgeting – to keep a track of how much money you’ve got, and where it is going – these will all help you to manage your money wisely, and help you improve your credit score,” explains Julie.
“The one thing that really puts a dent in your score is defaulting on a payment – even if you quickly catch up, the default stays on your record for several years. Be wary too, of loans that you have with a partner or friend, an ex, or a relative – debt and defaults that may be caused by the other person but which have your name on, can also affect you.
Sensible money management is always going to hold you in good stead,” says Julie.
If you need help with personal finances, investment strategies or insurances, then please contact Step Up Financial Planning.