5 ways to improve your credit score
Has your credit score seen better days? Don't panic! We're here to give you the handy hints you need to boost your creditworthiness and improve your chances of getting that all-important cash injection.
Let's get started:
Get a credit score check report
Firstly, it’s good to know where you stand. You're entitled by law to get one free credit report every 12 months, or within 90 days of receiving a credit rejection. For a small fee you can also request a report at any other time.
The credit reporting bodies in Australia are:
Pay those bills
Want to show that you can manage money? Then ensure you are paying bills on time – and make sure you pay future bills on or before their due date. Big bills are especially important – being 60 days or later to pay a bill larger than $150 will add another thumbs down to your credit score.
Get a credit card
Oddly, having no debt at all doesn't make you more creditworthy. Instead measured credit card use (and prompt on-time payments) is evidence of an ability to manage debt. Just make sure you keep the balance low, and pay it off regularly.
Already have a credit card? Makes sure you pay on time
Your credit card and loan terms is recorded on your report for two years, so make sure you have a reminder system in place to ensure you're never late with your weekly or monthly repayment amounts.
Or better yet, set up a direct debit to cover your minimum payment so you don't have to even think about it. Prompt repayments will go a long way to improving your score.
Using different types of credit
If you're able to manage several debts at once – say a car loan, a credit card, and a mortgage – your credit score will certainly rise.
Pay down that debt
The most powerful way to boost your credit score is one that’s probably obvious – pay down what existing debt you owe. That’s often easier said than done, especially if you’re juggling multiple debts, but consider getting on top of it all with a debt consolidation loan.
Not only will you be able to bring together all your debts in one, you'll be able to manage what you owe with one regular payment. This will improve your credit payment history plus make your life a lot less stressful in the process and avoid bad credit.