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Ways to improve your credit score
Lenders need to make sure that you’re financially healthy. They want to know how well you manage your money and how quickly you’ll be able to repay your debt.
Your credit score is a good reflection of your credit health. The good news is, your credit score isn’t fixed, and if you do find your score a bit low, you can always fix it.
1. Manage your financial commitments
Timely payments will increase your score. Creditors want to know how well you honour your contracts, late or missed payments will reflect poorly. If you do fall behind on repayments, try by all means to pay back to be on track with your commitments.
2. Pay your debts
High outstanding debt will negatively affect your score while paying it off will improve it. Demonstrating regular debt repayments shows you’re capable of managing your finances. While you only need to pay the minimum instalments, paying a little more every month is best.
If you’re unable to make a repayment, contact your creditors immediately to inform them.
3. Close what you don’t use
The less credit against your name, the lower your risk. Close all accounts you’re not using. Creditors assess the full facility of your credit agreements, even if they’re not being used.
4. Keep your credit limits high and what you owe low
This is a positive in the creditors’ eyes. When your limit is high, and outstanding debt is very low. This shows you can manage your debt.
5. Know your rating
Monitor your credit report for errors and inconsistencies. You are entitled to one free report per annum from credit bureaus.
Want to know more?
Meet with one of our financial coach who will assist you towards identifying your goals and objectives. By formalising these, you have something tangible for your budget to achieve, you and your coach can discuss to improve your budget and work towards achieving goals.
Call us on 066 285 5206 to speak with us.
