How to Easily Improve Your Credit Score?
Improving your credit score can be relatively easy – if you put your mind to it. But why does it even matter? Well, it matters because when you’re ready to buy your first home or you’re buying a different home and need to change mortgages, you’ll want to make sure you get approved. There are the top 5 ways to improve your credit score in Australia that you can find here.
Your credit score matters as financial lenders will look at this to assess whether they think you can afford to pay back the loan.
Top 5 Ways to Improve Your Credit Score
Finding the best ways to boost your credit score? Here are the top 5 ways you can choose to improve your credit score in Australia.
1. Know what is on your credit report (and check it for accuracy!)
It is handy to know what is detailed on your credit report so you know what might be impacting you. You’re entitled by law to get one free credit report every 12 months.
Your mortgage broker can help you assess your credit report and talk you through the details.
Many people are surprised to learn that there might be some errors in their file. This could be due to identity theft, a simple mistake or a forgotten phone bill. Contact your credit provider or credit reporting agency if you need to fix up anything on the report.
It’s great to get these types of issues sorted before you’re ready to purchase a home.
2. Have a credit card
It may sound odd but showing your ability to manage debt such as making regular payments on a credit card can work in your favour.
However, if you’re not good at managing a credit card be sure to keep your limit to a manageable minimum.
You’ll also want to make sure you don’t have too many credit cards as each credit application is added to your report and lowers your score. Too many applications can be seen as a sign of financial distress.
3. Pay your bills on time
This may seem obvious but making sure you’re never late with repayments is essential.
If remembering dates isn’t your thing then set reminders or a direct debit system to cover your minimum repayments.
Your credit card and loan information will be recorded on your report for two years.
Missing a payment on your electricity or mobile phone, for example, could lead you to be referred to a debt collector and that doesn’t look good on a credit report.
4. Don’t job hop (if you can help it)
We’re facing unusual times at the moment, but if you can stay in the same job this will be looked upon more favourably.
Of course, lenders are taking into account the current landscape, but they will be looking overall for evidence of stability.
It’s a good idea to be in a job for at least six months before applying for a home loan.
5. Partner with an experienced mortgage broker
Some people reason that applying for multiple home loans is the best possible way to gain borrowing approval. This assumes that (much like applying for a rental property or a new job) the wider you cast the net, the more likely you are to get a positive result.
But too many credit enquiries in a short period of time can actually damage your credit score and lower your chances of gaining lender approval.
To maximize your chances of obtaining a home loan, it’s best to partner with an experienced mortgage broker in Queensland who understands your needs and financial situation and who can match you to a credit policy.
At Coronis Finance, we understand how important mortgage approval is and the implications that a rejection could have for you and your family. That’s why our skilled team of mortgage brokers is committed to acting in your best interests. We’re dedicated to finding you the right home loan for your unique circumstances – one that will fit your needs, your budget, and your long-term financial goals. For tailored assistance with your home loan application, contact Coronis Finance today.