Looking for some tips on how to make your credit score go up, improve your budgeting and be generally better with money?
The more your credit score goes up, the better loans you can secure, so the more you can do with your money. Do you want to buy a house someday? How about a new car or a vacation? Your credit score can help with that.
Step 1: Pay your bills.
If lenders see you missing payments, it's a massive red flag that you're not going to honour any loan or credit card agreements.
If remembering bills is a struggle, try setting up some automatic reminders, planning a calendar or doing something else that can help jog your memory.
You can even set up your account to auto-pay — but be careful, because sometimes it goes wrong (or you might pay into the wrong account. Make sure to regularly check up on your automatic payments if you decide to use them.
Step 2: Have a credit history.
Lenders like to see the kinds of decisions you make and that you can handle bill repayments. But don't confuse having a good history with having none at all. The more positive repayments over time you can show, the better.
Step 3: Limit your credit applications.
Credit cards are a pretty standard form of payment, and they can even improve your score because lenders can track your payment history.
Just be careful you don't go over the limit. If you apply for too much credit, it's going to make you look as if you're unable to control your spending habits.
Step 4: Cancel unused credit cards.
When you do, make sure you're confident you won't be using that card again for any form of payment. Missed payments due to a cancelled payment method can and will harm your credit report.
Step 5: Don't move your debt around.
Moving debt around also looks odd — it's best to leave it where it is. Be patient, focus on paying off those bills on time and then you can watch your credit score go up.
Step 6: Don't share your bills either.
If you share your bills with others, their behaviour is reflected in your credit score. So double-check that your name is not on the identical bills — because if your friends don't pay their bills, for whatever reason, you get punished too.
Step 7: Check your credit score.
Three credit reporting agencies in NZ hold all your financial information — Equifax, Centrix and illion. They're all great choices, but they can (occasionally) get things wrong.
If your score is unexpectedly low and you know you've been excellent with your credit, it pays to check your credit report. You can always contact credit reporting agencies, sort those changes, and make your credit score go up.
The key takeaways from this blog are:
- Pay your bills on time.
- Have a credit history if you want to get approved for loans.
- Limit your credit applications.
- Cancel unused credit cards (once you've finished with them).
- Don't move your debt around.
- Don't share your bills with others.
- Check your credit report.