Let's decode your credit score and what's involved.
No matter where you are in your credit reporting journey, anyone and everyone has the ability to improve their credit score. Whether you’re new to credit reporting, have had a history of bad credit, or know the ins and outs of your credit report, we can help you better your credit score.
If you haven’t already read our last blog that delves into the make-up of your credit report, read it here. We’ve created a deeply detailed list of what your credit report is made up of so you can better understand the importance of the health of your credit report.
10 ways you can improve your credit score:
- Pay all your credit accounts on time.
- Timely payments have a positive impact on your credit score, showcasing your reliability.
Reduce Outstanding Debt:
- Focus on paying down existing debt, especially high-interest debts.
- Aim to keep your credit card balances below 50% of the credit limit
- Or, pay your credit cards out each month
Avoid Opening Too Many New Accounts:
- Be cautious about opening numerous new credit accounts in a short period.
- Rapidly opening new accounts can be perceived as a higher credit risk and may negatively impact your credit score.
Regularly Check Your Credit Report:
- Obtain and review your credit report regularly to identify any errors or discrepancies. You are entitled to a free copy of your credit report each year
- Dispute and correct any inaccuracies promptly to ensure an accurate reflection of your credit history.
Limit Hard Inquiries:
- Be mindful of the number of hard inquiries on your credit report.
- Limit applying for new credit facilities unless necessary, as multiple hard inquiries can have a temporary negative impact.
Pay out any outstanding defaults or court judgements:
- Finalising any outstanding defaults or court judgements will have an instant improvement on your credit score
Maintain a Long Credit History:
- If possible, avoid closing old credit accounts, as they contribute to the length of your credit history.
- A longer credit history can positively influence your credit score.
Utilise Credit Responsibly:
- Use credit facilities responsibly and avoid maxing out credit cards.
- Demonstrating responsible credit utilisation can positively impact your creditworthiness.
Spread of Credit Enquiries Over Time:
- The timing of credit inquiries matters. Spreading inquiries over time is better than having multiple inquiries within a short period. Older credit inquiries are seen differently than more recent ones.
Be Patient and Consistent:
- Improving your credit score takes time, so be patient and consistent in implementing positive financial habits.
- Consistent, responsible financial behaviour will have a lasting impact on your creditworthiness.
Understanding these aspects of your credit history empowers you to make informed decisions to improve or maintain a healthy credit score. It highlights the importance of responsible credit management, timely repayments, and strategic planning when considering new credit accounts.