Understanding credit

The basics

Applying for credit in retirement 

Whether you’re applying for a loan at the age of 20 or 65, there are certain application criteria that need to be met including: 
  • Proof of a regular income;
  • Good credit history; and
  • Ability to repay the loan (surplus income).


If you no longer have a salary, lenders can use other types of income to assess your ability to repay a loan. These include:
  • Pension
  • Regular withdrawals from retirement accounts
  • Rental Income
  • Interest Income
  • Negative Gearing Benefit
  • Dividends.
Some lenders may not recognise all types of income when assessing a loan. You can discuss this at the time of your application.

Retired or nearing retirement?

If you’re retired, or nearing retirement, you may be wondering how this impacts your ability to get credit. Even though your income situation may change, borrowing is still possible if you can meet the application requirements.

Thinking of closing a credit account?

If you’re thinking of closing a loan or credit card facility, it’s important to remember banks and financial institutions will require you to go through a full application to open a new loan or credit card, even if you’ve had the facility in the past.
Credit jargon explained

Here’s some common credit jargon you may come across, and the meaning behind each:

Surplus income

Your surplus income is the amount left from your regular income after you’ve paid all your commitments and living expenses. Your living expenses includes things like food expenses, insurance and entertainment. Your surplus income is what lenders looks at to assess your ability to repay a loan. Lenders follow this due diligence process to help customers avoid bad debt situations. 

Credit report 

A credit report is a document that summarises how you’ve handled your credit accounts in the past. This is your ‘credit history’. It contains information collected from a number of different sources. Lenders access your credit report in order to help determine your suitability when you apply for credit. Learn more by reading What is a credit report?

Comparison rate 

The real cost of a loan, taking into consideration setup fees, introductory offers and other fees. For example, though it’s often cheaper to buy clothes online, you must also account for shipping costs. The same goes for a loan, you need to know the total cost. Learn more by reading Lending interest rates explained.

Find more at Bank Jargon Explained.
Useful tools

Be smart about your credit health

Here’s a video explaining what a credit report is, what it includes and how you can use it to improve your credit health.

Check your credit history 

Checking your credit report has no impact on your credit report or credit score, and can help you understand your credit health. 
You can get a free credit report annually and within 90 days of you being refused credit, from each of the 3 main credit reporting bodies: 
Manage your debt

Are you finding it difficult to manage your debt?

When it comes to managing your debt, you are not alone. Whether you’re a current Heritage customer, or a customer looking for change, our specialist lenders and financial planners are here to help. You can also call the National Debt Helpline on 1800 007 007 for free and confidential advice, or visit moneysmart.gov.au for more help.
Not ready to talk right now? We’ve put some information together to help you get started with managing your debt more effectively.

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