How To Improve Your Credit Score

August 10, 2022

Your credit score is important for many reasons. If you have a good credit score, you are more likely to be approved for loans, mortgages and credit cards and will often find that you are offered lower interest rates and fees.

Your credit score may fall for various reasons, but not all of them are necessarily your fault. Having multiple credit cards, for example, can affect your credit score even if you manage them well and make payments on time. Closing accounts can also cause it to drop.

The best way to improve your credit score is to ensure you stay on top of payments and don’t end up falling behind or taking on too much debt when you haven’t the means to pay it back.

Giving yourself time to improve is also important. Your credit score won’t jump up overnight and it can take a long time to see noticeable improvement, so make sure you keep following the right steps and you should see progress.

Keeping your credit utilisation ratio down is also a good way to improve your score. Using more than 50 per cent of your available credit for long periods of time

can cause your credit score to drop. Aim to stay below at least 30 per cent but keeping under ten per cent will give you the best score.

Companies that carry out hard credit checks will leave a mark on your credit report, which can cause your score to fall. Minimise the amount of credit you apply for at one time as the impact of hard checks goes down as time goes on.

Having multiple accounts under balance is better than having one or two accounts with high balances. If you have three credit cards, aim to keep all of them below 30 per cent, rather than having two that are unused and one which is maxed out.

If you’re looking for a bad credit mortgage broker, contact us today.

Your home may be repossessed if you do not keep up with your mortgage repayments.

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