December 8, 2023

4 Tips on How to Improve Your Credit Score

4 Tips on How to Improve Your Credit Score

A credit score or credit rating shows how trustworthy you are as a borrower. It is like your “grades”  when it comes to credit performance. A credit rating is important because it influences your credit limit (or how much you can borrow), as well as interest rates and other terms. Hence for some of us, this is a very important grade to maintain. For this post, we will discuss how to improve your credit score. Before we continue, let us be clear that having a low credit score is not the end of the world. You can always improve it in time.

The main goal is to not get into any more debt unless it’s really important, or if you need a business loan. Just in case you need credit score help or get into one of these situations in the future, improving your credit score at present will be very helpful. Remember: there is not really such a thing as a quick fix to increase your credit score quickly – the bottom line is that making consistent payments over time is what’s going to prove your creditworthiness.

What Is the Credit Score That I Should Aim for?

Here’s an example of how Credit Scores are ranked: 

  • Excellent: 833 - 1,200
  • Very Good: 726 - 832 
  • Good: 622 - 725
  • Average: 510 - 621
  • Below Average: 0 – 509

If you want to improve your credit score, take note of the guide below:

Strategies to Improve Your Credit Score

strategies to improve credit score
Improving credit score needs financial discipline and the right strategies.

1. Credit Score Help: Paying Bills on Time

This may seem obvious, but this is one of the most important determinants that can help you improve credit score. Did you know that if you have more than $150 unpaid balance after 60 days, you will have a black mark on your credit report for 5 years? 

What Can You Do to Boost Credit Score?

  • Put your bills on an automatic payment schedule.
  • Track your bills using your smart phone’s calendar and set an alarm so you won’t forget.
  • Get a debt fix and consolidate your debts under one bill so it’s easier to manage.
  • If you have outstanding loans and debts, pay them as soon as possible

Having difficulty paying on time? Read our article How to Budget and Pay Debts When You are Behind on Bills.

2. Have at Least One Active Credit Account

As mentioned above, you need to have a good credit history to have a high credit score. If you don’t have any credits, your score would be zero. Now, before using this as an excuse to shop after reading this blog, you should learn how to use credit without impulse buying.

What Can You Do to Boost Credit Score?

  • Open a mobile phone plan (of course, only the necessary features).
  • Subscribe to a low-cost internet plan (or other necessary subscriptions).
  • Make sure these are registered under your name and address.
  • Don’t forget to pay before the due date.

3. Credit Score Assistance: Dispute Errors in Your Billings or Credit Report

credit score assistance dispute errors in your billings or credit report to improve your credit score

Errors are treated as a default and can stay on your credit file for years, so if you are wrongly billed or you see a minimal error, get credit score help and get in touch with a credit reporting body to have it rectified.

What Can You Do to Boost Credit Score?

  • Ask for your credit report and check if it is accurate (get reports from more than one provider for a more accurate result). In Australia, you can get in touch with Equifax, Experian and Illion to obtain a free copy of your credit report. 
  • Keep your receipts so when your credit card bills come, you can check side by side if the charges are correct.

4. Only Apply for Credit That You Know Will Get Approved

Every time you apply for credit, your prospective creditor will most likely enquire about your credit report. These are called “hard enquiries”, which may take a few points off your credit rating – if there are too many hard enquiries on your credit report, you will look like someone desperate for credit. Too many hard enquiries may also appear as though you cannot manage your resources or debts very well. Credit cards on “display” are doing you more harm than good. Importantly, when you call to ask for your credit report, this is called “soft enquiry”, and does not affect your credit score.

What Can You Do to Boost Credit Score?

  • Only apply for credit that you know will get approved. 
  • Avoid applying for additional credit cards which you don’t need.
  • In case you have been turned down, wait for a while before trying again.
  • If you have unused credit cards, close them so they get off your credit record.
  • Do not ask for a high credit limit. Lower is better.

So, these are our 4 actionable tips on how to improve credit score. Print this guide and post it somewhere to serve as a reminder. Don’t forget to share this article with your friends who might need a debt fix or help from this guide. If you are in deep debt and you need a consultant, reach out today for our free debt assessment by calling the number below:

1300 003 328

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