How To Improve Your Credit Score: 7 Simple Steps

Your credit score is one of the most important numbers in your life. A high credit score means you’ll qualify for lower interest rates on loans, and you’ll be able to get the best deals on things like cars and mortgages. A low credit score can mean you’ll have to pay more for financial products, and you may even have trouble getting a loan at all.

Improving your credit score takes time and patience, but it’s worth it. These seven simple steps will help get you started.

1. Get A Copy Of Your Credit File

First things first, you should find out where you stand. Getting a copy of your credit file can help show you if there’s an area you need to address.

You can pull a copy of your credit file from these two major national credit bureaus:

Then review each report to see what’s helping or hurting your score. You are entitled by law to request one free credit report every 12 months, or within 90 days of receiving a credit rejection. You can also request a report at any time for a small fee.

2. Check Your Credit Report For Any Inaccuracies

There can be inaccuracies or errors in records on credit reports. It might be incorrect debt amounts, debts you didn’t take out (as a result of identity theft), or a mistake by the lender such as not recording payments. It’s worth checking to make sure all the information listed is accurate—incorrect information could severely impact your overall credit score.

If there’s a mistake on your report, you’ll need to contact these bodies to fix it:

  • your credit provider
  • the credit reporting agency
  • the office of the Privacy Commissioner – if need be.

3. Pay Existing Loans And Debts On Time

Paying off your loans and debts on time is one of the key ways to improve your credit score. The best way to do this is to make consistent, punctual payments so you don’t fall behind.

On the flip side, if you miss your repayments this can also be recorded and can have a negative impact.

4. Show You Can Pay General Bills Reliably

Paying bills on time not only includes credit cards and personal loans but also any other bills you have such as a mobile phone and utility bills.

An easy way to stay on top of your bills is to set up automatic payments. It’s also important to make sure you notify your phone and utility providers if you move home or change your email address so you don’t miss bills. It’s also important to keep your payment details up-to-date.

5. Consider Your Situation Carefully Before Applying For Any New Credit

Irrespective of approval or not, simply applying for a new credit or loan product will cause it to show up on your credit report, which in turn may affect your credit score.

Multiple applications for credit in short succession can be a flag to lenders that you are under credit stress and could impact your score negatively.

Do your research online and talk to a lending agent before applying straightaway to get an idea of what you want.

6. Hold Onto Credit Cards You Can Manage

Whilst it may seem contradictory, holding onto the credit cards you currently have and paying them off each month can be useful. It’s a good start to show you can manage regular financial repayments.

However, you should be aware of the associated fees and risks. If you acquire a large debt on a credit card and a high-interest rate, your score may be harmed if you fail to pay your bills on time. Keep in mind that having a credit card is not necessary to establish your credit history

7. Lower Your Credit Card Limit

Lowering your credit limits is a good way to manage credits cards in your name. This will put a limit on how much debt you can take on and it could also help improve your credit score.

Take Advantage Of Your Good Credit Score

A good credit score is important for so many reasons – it opens up opportunities for homeownership, car loans, business loans and more. Whilst there’s some work that may need to be done initially, there’s always an opportunity awaiting.

When the time is right, Buddii Finance is the perfect place to go. We have a diverse range of lenders that we work with, so we can find you the perfect loan no matter where you are. 

We want to help you create a positive financial future for yourself and your business. With our experienced team, we can make that happen. 

Get a quote or call us on 1300 283 344 today!