How to improve your credit score
There are many ways to go about improving your credit score but fundamentally it does take time and requires you to maintain a healthy credit history.
Credit Savvy members can view their Credit Report Summary to see a summary of where they stand with these key categories.
Time can be an important factor in credit scores, especially when it comes to negative events such as defaults. The more recent an entry on your credit file, the greater impact it is likely to have on your score. Furthermore, each type of information has a set time period that it can held on file (Credit enquiries for example, are held on file for a maximum of 5 years).
Below are a few actions you can consider to improve your credit score:
- Demonstrate good financial responsibility by making all your repayments on time
- Make an honest assessment of your finances and only borrow what you can afford to pay back
- Limit the number of credit enquiries/applications you make by fully researching the credit products available in the market first, reading the appropriate product information and only make application once you are sure they suit your requirements and financial situation. Multiple credit enquiries in a short time frame can lower your score.
- Before applying, consider what type of credit you are applying for, who the credit provider is, and the impact this could have on your credit score
- Actively monitor and check your credit file for errors, making sure to alert providers and credit reporting bodies if you believe the information they hold is incorrect
Finally, it does help to understand the key elements that influence a credit score. Our Learning Hub article How is my credit score calculated is a good place to start.