Having a good credit score is important if you want to get any sort of loan to purchase a property, a vehicle, or asset finance.
A good credit score allows you to make use of a range of financial options, such as taking out a mortgage or loan, and owning your own credit card. Conversely, a poor credit rating can limit your options.
Defaults will remain on your credit record for five years, while missed payments will remain for two years. You may also be affected overseas if you have a bad credit rating in Australia.
Fortunately, you’re not stuck with a bad credit rating, and there are a number of practical steps you can take in order to improve it. Rather than simply ignoring your debts, the key is to re-establish a good credit history. There might not be a quick fix for a bad credit record, but there are several ways you can improve it over time.
Here are 5 tips to improve your credit score:
1- REQUEST A COPY OF YOUR CREDIT REPORT from the 3 major credit reporting agencies and agencies & look for things like incorrectly listed late payments and contact the credit reporting agencies if you see discrepancies. They’re as following:
- Equifax formerly known as Veda. https://www.equifax.com.au
- Experian. https://www.experian.com.au
2- PAY YOUR BILLS ON TIME
Sounds simple enough, but if you have trouble remembering this task, consider setting up reminders or text payment reminders with your creditors, or setting up direct debit.
3- HAVE A CREDIT CARD
Having available credit account and
making consistent repayments could
make you more creditworthy which can help improve your credit score.
4- REDUCE YOUR DEBTS
Create a plan to pay off your highest interest rate debts first while maintaining minimum repayments on your other accounts. You may want to get help from a credit counselling service.
5- LIMIT NEW CREDIT ENQUIRIES
Making multiple loan applications in a short period of time may decrease your credit score. Typically, credit reporting bodies take this into account when calculating your credit score.
You can find more information about how to improve your credit and maintain good credit on the following websites.
- https://moneysmart.gov.au/managing-debt/credit-scores-and-credit-reports
- https://www.getcreditscore.com.au
The content on this site is for informational and educational purposes only and is not intended as a substitute for professional credit or financial advice. Always consult with a licensed financial advisor/finance & mortgage professional before making any decisions based on the information you read on this blog.