Improve your credit health
Financial Planning | 9/11/2018 |
5 min read
We each have a personal credit record maintained by credit reporting bodies, and it shows how well we manage debt and repayments. When it comes to getting loans, whether it’s for a house, a car, or anything else, your credit report is something lenders will look at and access when you apply.
As ME Bank writes, this makes it important to maintain a healthy credit record. Yet in many cases, the first time people realise they have a poor credit record is when they get knocked back for a loan.
Recent research by consumer education website CreditSmart found most people are unaware of their credit score, and have never checked their credit report.
The thing is, your credit report is a key indicator of your credit health. And recent changes that have come out of the Comprehensive Credit Reporting regime could impact your credit record.
In the past, credit records largely focused on negative events like a missed loan repayment. These days, positive events are also recorded such as paying bills on time.
Easy ways to keep your credit record healthy
The good news is a few simple steps can keep your credit record in great shape.
1. Get to know your credit record – it’s free
You are entitled to one free copy of your credit report annually. There are a number of websites that provide this free of charge, including:
2. Have any mistakes checked out
Keeping an eye on your credit report allows you to pick up on any entries that appear incorrect. Just ask the credit reporting body for help with fixing this. It’s usually a free service.
3. Keep track of your credit score
Your credit score is like a summary of what’s on your credit report. The bigger the number, the healthier your credit record. It only takes a minute to check your score – and it’s free when you visit sites like Credit Savvy, Credit Simple and Get Credit Score.
4. Make paying bills on time a priority
In our busy lives it’s easy to forget due dates for bills. An easy solution is to talk to your credit providers about setting up automatic debits to ensure regular payments are made on time.
5. Keep a lid on debt
Only borrow what you need. Having too much credit can make it harder to secure a loan. Something as simple as having the limit on your credit card cut back can make a tangible difference to your credit score.
Maintaining good credit health brings its own rewards including a wider choice of loan products, and that can eventually mean paying lower interest rates.
This article is brought to you by ME. For more information, please visit www.mebank.com.au
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