Tuesday, 13 June 2023

Part 3: Tips for managing your credit ongoing

You’ve begun the hard work of cleaning up your credit history – congratulations! Now, your credit score will be on its way to improvement, which comes with significant benefits for your life and financial future.

 

Maintain your good credit record

Your goal now is to keep up your good credit history. You do this by consistently demonstrating that you’re managing your debts responsibly. Some key ways to do this and keep your credit score high include:

• Have a system to pay your bills on time, such as ‘set and forget’ direct debits.
• Make a budget and stick to it. A budget tracking app can help.
• Always pay more than the minimum owing on your credit card.
• Use cash more often and avoid excessive credit card debt.
• Add positive information to your credit report (such as long-term employment, paying your bills early), as it may help improve your credit score.

 

Prevent future issues

Equally, it’s important to nip any possible problems in the bud before they take root or change behaviours that could lead to a bad credit score. Some ways to do this are:
• Never make late or missed bill payments.
• Never default on payments.
• Avoid court judgements at all costs.
• Don’t make too many credit enquiries.
• Never get cash advances on your credit card.
• Don’t agree to co-sign a loan.
•If you’re struggling to keep up with your debt, review your options, as there may be a better way to help you manage them.
• Check your credit report regularly.
• If there are any errors on your credit report, dispute and fix them promptly.

 

The benefits of a good credit rating

The higher your credit score, the better your credit rating is. A low score equals a poor credit rating and tells lenders that you are a risky prospect for a loan. This could lead to you being rejected for finance, such as a home loan or a mobile phone contract.

A high credit score greatly increases your likelihood of being approved by your preferred lender for important things such as car loans, home loans and student loans. Some employers even run a credit check on potential employees.

If you have a clean credit record, you may be able to negotiate a lower interest rate with lenders, which could save you a lot of money over the lifetime of your loan. You may also be able to negotiate a better deal with creditors. This may mean greater flexibility, additional features, a loan term that suits your better, or even saving you the hassle of having to refinance by negotiating a better deal with your current lender.

Credit Repair Australia can help you better understand your credit score and remove any black marks on your credit report. Find out more about our credit repair solutions.