Your credit score is used by lenders to determine your lender-ability and in deciding what interest rate you’ll be charged. Having a good credit score could mean the difference in thousands of dollars spent or saved, so it’s understandably an important factor in your financial life. Here are some of the things that could impact your credit score.
- 1. Late payments or missed payments
Paying on time every month is probably the most important factor in maintaining a good credit score. Missed payments or consistent late payments could result in additional late payment fees and even negatively impact the interest rate you’re being charged.
Pay your bills on time, every time to ensure you maintain a good credit score; set up automatic payments with your bank to ensure you don’t miss any payments.
- 2. Applying for credit too many times
While it certainly pays to shop around for the best loan terms, each time you apply for credit it’s recorded in your credit report as an enquiry. Too many loan applications in a short space of time could raise a red flag with lenders and result in your application being rejected.
Before applying, do your research and only submit your loan application to the most appropriate lender. Also, be aware that different types of credit can impact your score in different ways. Alternatively, contact a broker who has experience working with a panel of lenders and can help you determine the best lender for your situation.
- 3. Keeping track of your credit score
With a number of free online sites providing credit reports, it’s easy to keep track of your credit score. Check your score regularly, and if you do find an error on your report – a late payment, an incorrect charge, or an overdue bill – you can contact the credit report agency to query it and have it amended.
You’ll find more info about credit reports and who to contact should you find an error right here.
Improving your credit score
Regularly checking your credit score and fixing any errors, along with following the guidelines to maintain a consistently good credit history will improve your chances of a loan approval when it comes to a loan application. If you’d like advice on how best to manage your credit score or to find out about applying for a loan, talk to one of our brokers.
References:
https://www.thebalance.com/things-that-hurt-credit-score-960510
https://thelendersnetwork.com/things-that-hurt-your-credit-score/
Disclaimer:
While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Finservice Pty Ltd (Mortgage Express) for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication. A Disclosure Statement is available on request and free of charge.
Finservice Pty Ltd (Mortgage Express) is authorised as a corporate credit representative (Corporate Credit Representative Number 397386) to engage in credit activities on behalf of BLSSA Pty Ltd (Australian Credit Licence number 391237) ACN 123 600 000 | Full member of MFAA | Member of Credit Ombudsman Services Ltd (COSL) | Member of Choice Aggregation Services.
