How to Fix Bad Credit in Australia

Your credit score Australia is a snapshot of your credit behaviour. A borrower can improve and fix the information on a credit file by making simple adjustments in debt management.

 Here are six practical steps to boost your credit score in no time.

1. Understand the credit score

A credit score is a valuable tool that lenders use to determine whether or not you are qualified of receiving a loan. They use this to evaluate the information stated on your credit report that also helps in making decisions when it comes to mortgage and lending. Your credit score is represented as a number between 0 and 1200. The higher your number is, the more likely you are considered to repay back a loan or credit.

2. Pay bills on time

When you have a deadline, it makes things easier for you to plan ahead. You know exactly when your lender is going to ask for the payment. The key to getting credit is therefore being a good borrower. Paying your bills on time is a huge factor considered on your credit report- which, means that it’s also considered in your score. Being able to show that you are trustworthy through paying on time is a plus. Paying late only decreases the chances of you getting credit. Instead of waiting until the deadline, when there’s already money available that’s allotted for your debt, don’t hesitate to pay. After all-more paying makes more blessings.

3. Apply for credit only when it’s needed

When your credit cards are there, you feel assurance that you have cash to spend. The thing is, we shouldn’t abuse this feeling of assurance. When you have money available, use that instead. Don’t keep investing on debts. The same goes for loans. Don’t take out a loan until you have considered these three factors:

  • Am I going to be able to pay this?
  • Do I really need this?
  • Why am I taking out a loan?

Do not open new accounts frequently or open multiple accounts within a short time span

Adding accounts will only add to the amount that you have to pay each month. If you can’t even pay one, then how do you expect you are going to pay for the new ones? Stick to one. Eventually, when you see that you are already capable of handling and paying another account, go apply for one. Go get one.

4. Minimise your outstanding balances —don’t exceed 30% of available credit limit with each account.

Having large balances to pay is hard. You have to cram and work hours more just so you’ll be able to pay them back each month. So having low outstanding balances is an advantage to you. You’ll just have to take out a little from your monthly budget, and then you’ll be able to pay your debt periodically.

5. Pay any delinquent accounts as soon as possible and then keep them current.

Nothing is more dangerous to your credit score than an unpaid debt. If you don’t pay your bills on time and you make it habit to miss payments—you don’t have to wait for a long time before your credit score drops by a notch. In the same way, paying off your debts immediately and keeping it updated at all times would surely boost your credit rating.

In reality, debt management is not an easy task. You can forget due dates, or intentionally miss payments because some needs seem to be more important than paying off a debt, for the time being. That’s why it is important to request copies of your credit report so you can prevent similar instances—by looking at your credit history. It can help you analyze your credit behavior, and find new ways of meeting your needs without getting into debt.

Your credit score Australia reminds you of the importance of paying credit obligations on time and managing your credits wisely. At the same time, it helps you check derogatory data in the credit report which are inaccurate or totally false. For example, if you spot a missed payment from five years ago which you know you have already paid in full; you can dispute the report with the credit reporting agency or the credit provider itself. At the same time, you can also check suspicious entries that may indicate identity theft and credit card frauds and immediately report it to the proper authorities for further action.