Whether you’re looking to get finance, have been declined finance recently or simply just want to know where you stand, knowing your credit score is extremely important.
What is a Credit Score?
Your credit score is a value between 300 and 850 that outlines your worthiness for credit or finance. Your credit score is determined based on information contained within your credit report. This includes your financial information such as current and past finance and utility applications, accounts, and payment history. To financiers it is a representation of the risk you present as a borrower and the likelihood that you will pay your bills on time.
How Do I Know What My Credit Score Is?
You can get a free copy of your credit report once per year from Equifax. It will include:
- Your credit rating
- Key factors impacting your credit rating
- Credit products you currently hold
- Past applications you have made for credit
- Repayment history
- Overdue debts that you have been listed as a default
How Can I Improve My Credit Score?
1. Know where you stand
It is extremely important to know where you stand by downloading a copy of your credit report regularly to ensure your contact details are up-to-date and all information listed within is correct.
2. Ensure all information is correct
Ensure all information listed on your Credit Report is correct and make sure that you query anything you don’t think is correct or you’re unsure about. You should speak directly with the institution you believe has made the error and try to clear up any misunderstandings or errors.
3. Have a credit card
If you have no prior credit history, you can be perceived as high risk to potential financiers. The fastest way to combat this is to take out a credit card with a small limit and use it regularly. Showing that you can manage your money and repay a credit card consistently can actually help improve your credit score. Just don’t let it get the better of you and get out of hand. The idea is to show that you are smart with your money and can pay your bills on time, every time.
4. Don’t submit too many applications in a short period
Financiers can see how many times you’ve applied for credit on your credit file and too many enquiries or applications tend to make them nervous. While it is definitely worth shopping around when it comes to finance and utilities, keep in mind that this can actually work against you as well. Each application that is added to your file lowers your credit score. So while you may think you’re doing the right thing shopping around to get the best deal, just keep in mind that limiting the number of applications you submit will help to protect your credit score.
Thankfully here at Loans For U, we have accreditations and relationships with over 40 of Australia’s most trusted bank and non-bank financiers and can compare them on your behalf to find the perfect finance for your individual needs without damaging your credit file with multiple applications.
5. Pay your bills on time, every time
Although your utilities company will likely not provide information on whether your accounts are paid on time, it is still important to ensure these are paid up to date. This will help to avoid unnecessary defaults which can negatively impact your credit file and your ability to get low-rate finance. It is also important to make sure your details are up to date with any utility providers such as phone companies and electricity providers so that they can contact you about any account-related charges or bills.
6. Try to avoid moving house or changing jobs too frequently
Financiers want to see stability and consistency. Not only do they want to see you paying your bills, but they want to know that you’re likely to be able to pay your bills in the future and are able to be contacted in the event that you stop paying your bills. Having stable employment and rental/boarding history or owning your own home can help to show this stability.
Looking for low-rate finance?
If you’re looking for bank-beating finance rates on a car, motorbike, boat, caravan or home, then look no further, simply speak to the team at Loans For U today on 1800 538 287 or alternatively, get an instant quick quote now. Our friendly and professional consultants specialise in finding the best deals on finance no matter what your credit score is.
