Whether you’re switching phones to save a few dollars or buying a house worth hundreds of thousands, your credit report is usually one of the first check points to get through when applying for credit. Over the next 12 months, credit reports will begin to tell financial institutions more information about you, including;
- Which loans you actually went ahead with
- Whether you have a pattern of missed payments
So it’s more important than ever to understand how to improve your credit report. Here are four important things you can do to strengthen yours:
1. Minimise your loan applications.
The more enquiries for credit you have on your credit report, the more desperate you look for credit. Talk to the lender honestly about your situation to get an idea of your potential eligibility before you make an application to avoid an unnecessary credit enquiry being recorded on your report.
2. Make payments on time.
Seems obvious, but it’s important that you make your repayments when they are due. Don’t be afraid to be upfront early on with your lender if you are struggling to make repayments. By working together on an agreed solution, you’re less likely to end up with a default on your credit report. A default on your credit report sets off warning bells to a lender and can stick around for years.
3. Less is best
If the goal is to maximise your play money to prove you can afford a new commitment, it goes without saying that you need to minimise your debts. Consider reducing card limits as you pay them down. Consolidate debts to potentially save on interest and have one simple, manageable repayment. Avoid topping up personal loans, credit cards and store credit. Sometimes you need to do it tough for a period of time to force you to change some bad habits and get yourself set in the right direction.
4. Double check your report
ASIC recommends that you get your credit report from online trusted providers including Creditsavvy, Credit Simple and Getcreditscore. Check what is on your report with care. Identity theft or even human error could mean there are credit enquiries on your credit report that you didn’t even make. If you see an enquiry you didn’t make, you should report it, get it investigated and removed by your lender.
How we could help
Easy Street offers a low rate unsecured personal loan ideal for consolidating debts, and a low rate credit card which could help you get out of higher interest store or credit card debts. Together with free account alerts, there are a number of ways Easy Street can help you put some of the above tips in to action.
This information is general advice only and does not take into account your objectives, financial situation or needs (your “personal circumstances”). Please consider if this information is right for you before making a decision to acquire any product. Easy Street Financial Services is a division of Community First Credit Union Limited ABN 80 087 649 938 | AFSL and Australian credit licence 231204. Credit eligibility criteria, terms & conditions, fees & charges apply.