Top Tips to Fix Your Bad Credit Rating in Australia
Is your credit score keeping you from reaping the rewards of being a responsible and financially savvy adult? Well, it’s time to take control of your financial future and start changing to tackle those lousy credit ratings.
It can be daunting, but with the proper knowledge and tools by your side, we promise it won’t be nearly as scary. So let Ezilend help and guide you through this process with these top tips to fix your bad credit rating.
What Is a Credit Score?
Before we jump into how to repair your credit score, let’s go over what it is. A credit score is a numerical representation of how you manage your money and credit accounts.
Credit scores are like the report cards of adulthood – they measure your fiscal responsibility over time. How you shop, save and spend each day is distilled down to a magical number. When was the last time you actively considered your credit score?
In Australia, there are three leading credit agencies: Equifax, Illion and Experian, which provide the figures that make up this magic number.
The higher the figure, the better; a golden score of 800+ indicates you’re great at managing your finances. On the other hand, anything below 500 might align with a bad candidate for a loan or a mortgage.
Why Do You Have a Bad Credit Score?
Growing up in Australia has engrained in us that debt and credit scores aren’t something we need to take seriously. Unfortunately, this makes managing our finances challenging and often results in poor credit scores.
Your bad credit rating might be due to the following:
- Lack of financial management
- Missed payments, or bills
- High balances on debt or credit cards
- Too many inquiries in a short period
- Signing up for too many credit cards
- Defaulting on a loan or not paying back loans
- Not having enough financial assets to show lenders
How to Fix Your Bad Credit Score in Australia
Now that you understand your credit score and the factors behind it, it’s time to make a plan to fix it.
- Get Familiar with Your Credit Situation: Understand your current credit score. You can do this free by visiting the mentioned Credit Reporting Bodies’ website. Read the reports closely, as they provide valuable information about your credit health.
- Prioritise Paying off Debt: Once you know what’s going on, start planning to pay down your debt. Prioritising this will improve your credit score, showing lenders you are taking responsibility for the money you owe them.
- Pay Your Bills on Time: Along with paying down debt, making sure you pay all of your bills on time is key to improving your credit score. Set reminders in your calendar to make every payment and avoid getting hit with late fees.
- Reduce credit card debt: Start by cutting back on spending, and focus on paying off the debt as soon as possible. Pay more than the minimum to get rid of your debt faster.
- Don’t Apply for too Many Credit Cards: Each application will show up on your credit report. These multiple inquiries can lower your credit score quickly.
- Monitor Your Credit Report: Finally, monitor your credit report regularly. Which helps you keep an eye on what’s happening with your score and ensure you’re staying on track.
Talk to Ezilend Today
At Ezilend, we focus on making loans as personal as possible because we believe people are more than just a credit score. We have 25 years of experience in the financial sector, and our quoting and pre-approval system is simple.
We also have an extensive network of lenders who back us, which is why our interest rates are some of the lowest in the country. So whether you need a personal or business loan, we can help you get the best rates possible. So what are you waiting for? Contact us today to get started.
