Your credit score is a number based on your history of borrowing and repayments that helps lenders work out how safe you are to lend to. Generally, a higher credit score is considered better as it indicates lower risk. You must aware that, having a poor credit history or a low credit score can seriously impact your finances and chances of getting a home loan. Although a low credit score has always been a worry, it’s not impossible to recover. There are 5 ways to help you to improve your credit score that includes:
5 ways to improve your credit score
1. Pay off your bills/repayments in time
This may seem obvious, but a lot of people may overlook their bills. It’s always recommended to set up direct debit payments for the monthly bill. Pay off all your bills, and make your repayments in time, without fail so that your credit score will build up and improve as you go!
2. Think twice before applying for credit cards
Don’t go overboard with too many credit cards, and only apply for credit when you need it. This practice would save you from the unnecessary burden of repayments and would build a good credit score.
3. Utilize your credit generously
Make sure that you are always within your credit limit. When you utilize your credit generously, you are contributing to improving your credit score.
4. Pay off any existing defaults
You must pay off the unpaid arrears if any, such as your loan and credit card repayments, or utility bills that are overdue for more than 60 days to get back on track.
5. Showcase your old debts
If you have paid off some old debts like a car loan or a personal loan, with a track record of timely repayments, it is a great addition to your report. When you showcase your paid off debts, it adds to your ability that being able to pay back what you owe.
To get help on getting your credit score on track, don’t hesitate to contact us. We have experts who can help you with your credit record back on track to help you get a loan. Our mortgage brokers in Point Cook can also help you with your mortgage or refinancing.