Easy ways to boost your credit score
Written on the 2 November 2020 by Arrow
Most Australians are only vaguely aware or completely unaware of the fact that credit-reporting agencies monitor their financial transactions.
While most Australians don't give much thought to what's on their credit report, the credit score that's based on the contents of that report can have a significant impact on your financial choices. A modest score may mean you miss out on getting a mortgage or business loan.
There's no shame in relying heavily on your credit card or delaying bill or loan payments to help ride out the financial impacts of the pandemic. However, it is worth understanding how the financial decisions you're making can affect your creditworthiness.
Know the score
The two big players in the credit-reporting industry are Equifax and Experian, but Illion may also have a 'consumer credit report' on you. If you're based in the Apple Isle, the Tasmanian Collection Service will be keeping an eye on whether you're paying your bills.
Credit scores range from 1 to 1000 or 1200, depending on the agency rating it. If you discover your score is around 500 or better (again, depending on the agency) you can take comfort in the knowledge you're of above-average creditworthiness. If your score is lower, there are some simple remedies.
Credit repair 101
Here's what you need to do to boost your creditworthiness.
Sort out any unpaid bills
If you've been wrongly charged for something, act quickly to get the charge removed. Start by contacting the business that has mistakenly billed you. If that doesn't resolve the issue, contact the credit reporting agency.
If you've been legitimately charged but didn't get the bill or were unable to pay it, contact the creditor and negotiate repayment arrangements.
Stop applying for credit
On this point, it's worth considering alternative options before applying for credit. While applying for JobKeeper or JobSeeker, or withdrawing money from your super account, may have other financial implications, your credit score won't be impacted.ii
Don't put off paying bills for too long
Unless the business you owe money to has put in place other arrangements, if they send you a bill for $150 or more and you don't pay it off within 60 days of the due date, your late or missing payment will stay on your credit report for the next five years.
Get on the front foot
This is particularly important if you are hoping to borrow money to buy a home, start a business, or for a major purchase. If you'd like advice about getting your finances back into shape and maximising your ability to access credit in the future, please call.