Your credit score is crucial to you being awarded a home loan or any other loan that you apply for, and it’s the first thing that banks look at when you apply. Getting your credit score in the green is not as hard as it may seem; however, if your score isn’t where you’d like it to be, here are nine helpful tips to help you improve it once and for all.
1. Don’t Make Late Payments
Always ensure that all of your payments are on time and for the correct amount. Every time you are late with a payment, it can negatively affect your credit score.
2. Don’t Skip Payments
It may seem obvious but ensure that you’re on top of all of your debit payments every month. Skipping a payment even by mistake can result in a mark against your name from that lender.
3. Don’t Max Out Your Credit Cards
Keeping a bit of breathing room on your credit card will help you maintain a healthy credit score. If you do have to max them out for whatever reason, be sure to top it up as soon as you can.
4. Don’t Apply for Credit Often
If you are a serial credit applier and get turned down often, your credit score will take a hit. Only apply for credit if you have to and then be sure that you meet all the requirements to ensure its successful. Looking around for a new Credit Card or Personal Loan, I’ve seen it happen that the person didn’t realise it would hurt their score and in 1 night applied for 3 personal loans, all which were rejected (as they saw you had applied for multiple loans). The client thought doing this would allow them to pick the right option. Unfortunately all it did was remove massive amounts of points from their score to the point they couldn’t apply again for well over 6 months.
5. Check Your Credit Score Often
Many free resources allow you to keep an eye on your credit score. Be sure to check yours often and adjust your actions accordingly. I know, I know we say this all the time, but its really important we are fully aware of our score and know when its reduced so we can jump into action and make sure it was for a valid reason. Banks, phone companies and other credit providers make mistakes, the difference is they don’t care so you need to be vigilant.
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6. Use Different Types of Credit Accounts
Be sure to have a range of credit accounts in your name, all of which are paid on time. These can vary from clothing accounts, credit cards, electricity bills, phone bills ect. All will show your ability to handle repay different institutions. Note: Buy Now, Pay Later institutions have the ability to seriously impact your credit score if you miss a repayment. Try to limit this type of purchasing and go back to our grant parents day…if you don’t have cash you can‘t buy it.
7. Negotiate a Settlement
Most institutions, especially medical ones, can be negotiated with to restructure your debt. This shows that you’re making an effort to pay it off and this will, in turn, improve your credit score.
8. Consolidate Your Debt
Many companies can consolidate your debt for you. This involves them paying off all your accounts so that you owe them a single large sum, with less interest. This is often much easier and simpler to pay off. Just make sure you chop up all the old cards and DON’T re-open anymore.
9. Create a Viable Plan
Creating a plan to improve your credit score and sticking to it is a great way to help yourself get back into the green. Lay it out and get some professional advice if necessary. We work with many wonderful Accountants and Financial Planners who we can refer you to if you need help. Or just want budget and numbers help, we are here to help you!
Following these tips will help you get the kind of credit score that opens doors for you, instead of having them slam shut in your face. It will take work and effort, but in the end, the results are worth it.
For home loan assistance, contact BlackBox Finance through submitting an enquiry in the contact us section below, calling us on 1300 70 12 17 or sending an email to email@example.com. Servicing Palm Beach, Currumbin, Burleigh Heads and the beautiful surrounding areas. We are your local Palm Beach Mortgage Brokers.