Mid-year check in: 3 ways to use financial goals to improve your credit score
Now if you’re like the team here at Credit Savvy, you promised yourself that this year would be the year of saving money, cutting down on unnecessary costs, and paying off your debts. That’s music to our ears as all of these actions should help to improve your credit score!
Killing two birds with one stone – savvy! A better credit score might even get you a better interest rate on the credit products you need to assist you with your goals.
1. Saving money
Have a stock take of where you are at with your set goals. Work out how much you need to save to catch up on a weekly basis. For example, if you are $1,000 behind your saving goals, you may need to catch up by an additional $50 per week for the next 20 weeks.
Savvy Tip: Make sure you pay your phone and internet repayments are made on time as defaulting on payments will damage your credit score.
2. Cutting down on unnecessary costs
Awww it is hard to give up that morning coffee but maybe it’s not the coffee that you need to cut. Packing your work lunch a few days a week could put $50 back in your pocket! That could be just what you need to keep up with your saving goals.
Savvy Tip: Use a budgeting app to help keep your expenses in check! It’s a great way to be more mindful of your consumption too.
3. Paying down debts
The key thing here is not to miss your repayments, with the new comprehensive credit reporting system (CCR) any missed repayments will appear on your credit file which could lower your credit score.
It’s also a good idea to pay down your debts in the order of the highest interest rates, e.g. credit cards, first to save you the most. Think you may be paying too much interest? Do your research and compare products for a rate that may suit your financial needs better. Reducing interest payments can be just as good as saving!
Savvy Tip: Setting up a direct debit to make at least the minimum payment (if you aren’t sure you can pay off the whole amount every month) is an easy step to avoid missing your repayments. Don’t forget to set up an alert in your calendar to top up any amount you can afford in addition to the minimum to keep paying down your debts each month.
If you haven’t signed up yet, you can check your Experian credit score and credit file information for free at Credit Savvy.