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Tips to boost your credit

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What is a credit score?  

In Australia, a credit score is a number value that ranges between 0-1000 or sometimes up to 1200. The higher your score, the better your credit. 

The average credit score in Australia ranges around 550; scores above that are considered to have good credit. Having a good credit score is important as it creates creditworthiness, which allows one to be able to receive credit from banks or additional financial institutions. For big purchase loans such as a car or home, it is essential that you have maintained good credit to ease getting approved.   

Lenders rely on credit scores to check how reliable your history with money is and determine the risk factor of lending money to you.  

Now that you understand what a credit score is, and why it is important you can use the provided tips to boost your credit.

  • Complete your payments on time 
    In order to have and maintain a good credit score, you must ensure that you pay your bills and loans on time. If you are late in paying your credit card bills or build interest from other missed or late payments, it can impact your overall credit score. You can set up automatic payments for most major bank accounts, or reminders on your phone so that you remain consistent with your payments.  
  • Apply for credit card  
    Applying for a credit card is a great way to start gaining more credit. If you are looking to build your credit score, this is the best place to start. If you are signing up for your first card, be sure to do your research on what type of card would be best suited for your needs and within your earning limits. Discuss what options and eligibility you have with your bank. 
    Be mindful not to apply for too many credit cards as well. If you have several credit card accounts, it can be more difficult to keep up with payments which will have an impact on your credit score and also put you in greater risk of accumulating debt.  
  • Pay your existing debt and loans regularly  
    Financial lenders look at credit scores for security that the borrower is stable and reliable with payments. It is normal to have some debt, but important to make sure you oversee your payments for it are completed in time. You should regularly pay at least the minimum required amount off your debt or a higher amount, if you are able to, in order to minimize the amount of interest you have to pay.   
  • Review and monitor your credit payments/errors 
    By checking you card statements and report you can gain further insight into your credit history. If there are any discrepancies in your credit reports or financial information, you can get ahead of them before they begin to impact your long-term credit score. By doing so, you additionally protect yourself from any potential threat of fraudulent activity or identity theft.  
  • Consult with financial experts (have higher credit limit, steps for repayment, which loans is best for you before applying)  
    Consulting with a financial expert has many benefits in securing your financial stability. An expert can always be of better assistance in navigating your exact financial situation and how to best improve it. At LIFE, our team of financial experts hold a wealth of knowledge in relation to finance. Prior to applying for a loan or new credit card, it would be beneficial to consult with an expert who can help you decide which loan and payment plan is best suited for your financial needs. In the long run, this will ensure you are making wise financial decisions and therefore left with a great credit score.   

Book in a consultation with one of our financial experts HERE!  

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