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Posted on 2018-06-23

Top Tips to Improve Your Credit Score

Your credit score becomes really important when you are making big finance decision such as buying a new car or getting your first home.

Small issues such as late bill repayments, but also more serious situations like defaults and bankruptcy can all impact on your credit score.

While your credit score is important, having a low score today doesn't mean you will have a low score forever. Generally, your credit file retains data for up to 5 years.

As a borrower or future borrower, it's very helpful to review your credit report often and understand what types of adverse events a lender can see on your report. Knowing how you can avoid getting a bad score and developing better spending habits are helpful in ensuring your score increases over time.

These are our top 3 tips that can help you improve the health of your credit score:

If you have been declined, do not apply again until you get advice

Your credit report records all the credit applications you make, the value of those applications and whether you were approved or declined. All credit rejections can have a negative impact on your credit score. For this reason, if you are declined for credit, chat to a specialist lender who may have sound advice and better options for you.

If you are facing financial hardship, talk to your bank or provider ASAP!

Most creditors are able to assist clients who are facing financial hardship. If you are aware that you may need to make repayments late, or that you may not be able to make repayments at all for a period of time, speak to your provider before a default letter is issued. You may be able to arrange alternate payments or even place a hold on your debt repayments before the issue escalates and is reported on your file. Many defaults can be avoided if action is taken early.

Direct debts can really add value to your credit score

How? Paying bills on time demonstrates to creditors that you have good financial habits and are not as likely to default on repayments. Continuous late repayments can negatively impact your credit score as it demonstrates bad habits and high risk. Setting up direct debits for all your bills, credit cards and loans is a quick and easy way to improve your credit score.

There is no silver bullet solution when it comes to repairing credit, but there are definitely ways to ensure your credit score does not decrease.

For more information on how to improve your credit score, or how to get finance with a low credit score, our team can help. Call us on 1300 844 970.

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