Finance
4 valuable lessons to help improve your credit
One of the most important things a lender will look at when you apply for a loan is your credit history. Your credit history could mean the difference between getting a home loan or not. If you are struggling with a poor credit history and are worried about approaching a lender for a loan, don’t worry, we’ve got 4 valuable lessons to help improve your credit history in no time.
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#1 Stop using your credit card
Our first lesson is a big one. In order to quickly improve your credit history, you must stop using your credit card to make purchases. This will only make matters worse for you in the long run, as it will raise your credit balance and ultimately disrupt your credit score.
If you can, choose to make purchases using cash only. Better yet, if you are able to, try to avoid unnecessary purchases altogether and instead put that money towards paying off your credit card.
#2 Pay each bill on time
This may come as a given for many, but it is still worth mentioning. If you make the effort to consistently pay your bills on time, lenders will take this into consideration. It shows that you are actively trying to improve your credit score. To stay on top of things, try writing due dates down on a calendar, or set reminders for yourself regarding when certain bills might be coming. If possible, even set automatic payments for any bills.
Also, if you currently have any outstanding bills, it’s best to take care of those first. This will put forth a positive contribution to your credit data and will help improve your credit score.
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#3 Do not close or open any accounts
When trying to improve your credit score, it is important that you do not close any accounts. In fact, they actually may be able to help you. Lenders will want to see that you currently have at least three open sources of credit. The longer you’ve had an account open with no issues, the better, as it’ll also improve your credit age and therefore help with reducing your credit score.
During this time, it’s also best to not open any new accounts either. Do your best to not shop around for opportunities to open new accounts. This means putting off purchasing a new car, applying for a new credit card or approaching a lender for a home loan. This can all be done at a later time when you are in a better financial position.
#4 Be patient
Last, but not least, one of the most important lessons you’ll learn when it comes to repairing your credit history is to be patient and persistent. It’s important to keep in mind that the damage done to your credit file did not appear overnight and, therefore, it will not be repaired overnight.
By actively making the effort to improve your credit score, you are taking control of your financial situation, meaning that the tough times won’t last forever. Keep trying to the best of your ability and you’ll have a clean credit file in no time.
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Tags: credit, saving, bad credit, credit report, debt consolidation
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# Quoted rate applies only to PAYG loans with LVR of 80% or less with security in non-remote areas. All applications are subject to assessment and lender approval.
Lendi is a privately owned and operated Australian business. Our mission is to change the way Australians get home loans by providing a faster, smarter and more secure home loan experience designed around the customer’s convenience and needs. Although Lendi compares over 1600 products (2,500+ products including feature and pricing variations) from more than 25 lenders, we don't cover the whole market or compare all features and there may be other features or options available to you. Lendi Group Pty Ltd, which is the ultimate holding company of the Aussie and Lendi businesses is owned by numerous shareholders including; banks such as CBA, 1835i (ANZ’s external venture capital partner) and Macquarie Bank, the Lendi founders and employees, and a number of Australian institutional investors and sophisticated investors including UniSuper.
*WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. The comparison rates are based on a loan amount of $150,000 over a loan term of 25 years. Fees and charges apply. All applications are subject to assessment and lender approval. Quoted rate applies only to PAYG loans with LVR of 80% or less with security in non-remote areas. All applications are subject to assessment and lender approval.
IMPORTANT INFORMATION: Loan terms of between 1 Year and 40 Years are available subject to lender and credit criteria. Maximum comparison rate will not exceed 14.99% (see comparison rate warning above). Any calculations or estimated savings do not constitute an offer of credit or a credit quote and are only an estimate of what you may be able to achieve based on the accuracy of the information provided. It doesn't take into account any product features or any applicable fees. Our lending criteria and the basis upon which we assess what you can afford may change at any time without notice. Savings shown are based on user inputted data and a loan term of 30 years. All applications for credit are subject to lender credit approval criteria. Top rates include lenders who are on our panel and are then defined by the circumstances provided by the borrower.
The Lendi Group Pty Ltd, which is the ultimate holding company of the Aussie and Lendi businesses is owned by numerous shareholders including; banks such as CBA, 1835i (ANZ’s external venture capital partner) and Macquarie Bank, the Lendi founders and employees, and a number of Australian institutional investors and sophisticated investors including UniSuper.
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