7 ways to improve your credit score
Is your credit score as high as you need? Here are some tips that can help you improve it.
Your credit score is a number that helps lenders to determine how safe you are to loan money to. It is based on information in your credit report, such as your borrowing history and if you have made your payments on time. If you have a low credit score, you can be considered a higher risk and some lenders can be hesitant to give you a loan or credit, or may even charge you a higher rate compared to a person having A good credit score.
A low credit score may seem dificult, but it is not impossible to recover from. That being said, the improvement of your credit score may require some work on your part.
How to improve your credit score?
1. Pay existing repayments on time
A statement of punctual payment record can help to create a stronger credit score. Since the introduction of comprehensive or “positive” credit reports, positive data (such as making your repayments on credit or loan products) can now be included on credit reports. Otherwise if you miss your payments, this can also be recorded and can have a negative result.
2. Pay bill when due
Paying your electricity and public service bills can also improve your credit score. This is particularly important if the invoice is worth $150 plus. If the payment is greater than $150 and at least 60 days overdue, a failure can be listed in your report. The default values are one of the most important black brands that may appear on a credit report. repayment defaults will remain on your report for five years. Consider setting up automatic payments to help you stay at the top of your bills and make sure you pay bills to telephone and public service providers if you move. You can also ask your utility providers if you can receive your bills by email.
3. Consider carefully before applying for a new credit loan
Whether you are approved or not, the fact that you have applied for a new credit or loan product will appear on your credit report, which can affect your credit score. If you perform multiple credit applications in a short time, this can report to the lenders you are in credit stress and you have a impact on your score. Also replacement or better structured a loan product – may help you get out of Debt and improve your credit score in the process. However, Be careful with this strategy, with each credit application being recorded on your credit report and lenders can always consider it as a red flag if they see a history of loan applications.
4. Contact your financial or credit advisor if you need help
If you notice that it is difficult to manage your payments or bills, you can ask your credit provider for financial hardship assistance services. Financial advisors provide free, independent and confidential service, and they can help you with things like developing a budget and negotiation with your creditors.Be careful ofcompanies that charge you to “repair” or “clean” your credit report. You can not pay to delete information about your credit report that is correct, even if it is bad.
5. Check your credit report for any inaccuracy
It might be worthwile carefully check ingyour credit report so that all the information listed is correct. If your credit report contains incorrect information, this could have a significant impact on your overall credit score.
Examples of credit inaccuracies may include:
- Incorrect debt amounts or duplicate debt information.
- Loans you did not take out (this can be the result of identity theft or fraudulent activity)
- Un-recorded payments
By compareing your credit report against bank statements and other financial statements, you can possibly identify any inaccuracy on your credit report. You can then contact your credit provider or credit report body and ask them to change your report. In turn, this could may improve your credit score. You can request a copy of your credit report from the three main credit reporting agencies of Australia: Equifax, Experian and Illion.
6. Have credit cards you can manage responsibly
Keep maintaining credit card payments on time. This can help you demonstrate a positive repayment history and improve your score.
it is important to know the costs and risks involved. For example, it can be easy to be in debt on a credit card and this may result in a high interest rates and your score can be affected badly if your refunds are late. Remember that you do not need to have a credit card to establish a credit history.
7. Lower the limit of all credit cards you have
If you have credit cards you may consider lowering your credit limits. This will reduce the amount of debt you can accumulate. This could also help improve your credit score.