Improving Your Credit Score

I am going to tell you in the next 3 minutes exactly how exactly your credit score works and how to improve it (and how not to wreck it). And some of these may not have occurred to you before.

(And if you have a young adult in your life, you need to forward them this email).

I was explaining to my kids on the weekend (whilst they were lying on the couch and not doing any chores) what a credit score is and how this mystery number is calculated. They may have even looked up from their phones for 10 seconds.

I explained how important it is, and that every lender runs a credit score before providing a loan and uses this number to make decisions (we also run it before we submit a loan for you so we can get in front of any potential issues and deal with them).

They looked at me like I was speaking Swahili. Hopefully some of it went in anyway (Hakuna Matata).

Below are some tips for making sure your credit score is the best it can be.

If you want to IMPROVE your credit score do this:

• Pay every bill on time, every time, including phone plans and utilities, not just loans

• Keep credit card balances well under the limit, ideally below 30%

• Pay down credit card debt rather than moving it between cards

• A long, stable history with the same accounts

• Apply for new credit only when you need it

• A sensible mix of credit types, all managed well

If you wanted to make your credit score WORSE do this:

(apart from the obvious of not paying your debts at all)

• Missed or late payments, even by a few days

• Defaults, court judgments, or bankruptcy on file

• Cards maxed out or sitting close to the limit

• Make several credit applications in a short window

• A declined application on your file

• High total debt relative to income

• Close old accounts, which shortens your history

(A few of these may have surprised you)

Are you worried you may have an issue on your credit file?

We work with people who can clean up your file and help you.

We work with lenders who understand life gets in the way and will work with lower credit scores.

Want to chat about it? Sort of like a colonoscopy, lets just deal with it, no judgement here:

Book a Chat Now

PS. Little tip - you can, for $10 a month get your credit score emailed to you without a check on your credit file - www.equifax.com.au