How to build a credit score over time
A good credit score is like being a student who consistently hands homework in on time. It shows you’re reliable. Making steady, on-schedule repayments sends that signal to lenders. Do it over time and you build a strong track record.
How to use credit responsibly
Anxiety about credit is normal. Amid a cost-of-living crisis, control over our finances has never been more important. Darlene Neu, co-founder of The Money Collective, says responsible use can support long-term borrowing power. “The key is finding the right balance. Use credit deliberately for small, planned expenses that you know you can repay immediately.” Consistent, on-time repayments create the type of financial footprint lenders favour for home-loan applications or rental approval. Used well, credit can be part of a broader strategy to manage debt and get ahead financially.
Start small when building your credit history
If you want to build credit, consider CommBank’s Interest-free Low Fee credit card. It’s credit without too many moving parts: no interest, no late fees and a $10 monthly fee that’s waived if you don’t use it and have paid off your previous statement in full. If you’re just starting out, its worth understanding what to look for in your first credit card.
Develop healthy habits
“The healthiest habit is to start with education,” says Neu. Understanding how credit cards work, like the interest, fees, repayment timelines and what happens if you only pay part of the balance, sets strong foundations. She also advises being deliberate when using credit. “Ask yourself whether the purchase is a genuine need or just instant gratification and remember that all repayments will come from your future earnings.” Other helpful safeguards include tracking weekly usage in the CommBank app, setting up alerts for payment dates and only putting purchases on credit that you already have the savings to cover.
Use credit to manage cash flow and create breathing room
Putting planned purchases on credit and paying the balance in full on time can keep your savings untouched and ready for when life throws you an unexpected curveball. “Keep savings for emergencies and financial stability, especially if your income is variable,” suggests Neu. Longer payment cycles can also help smooth cash flow, especially if your pay cycle doesn’t align with your bills. For purchases of more than $100, CommBank’s StepPay splits transactions into four equal interest-free payments, helping you manage costs while protecting your rainy-day fund.
How to get value from credit
“I used to avoid credit because I didn’t want to end up in debt,” says Louise. “I’m proud to say, since I started using a credit card about 15 years ago, I’ve never paid interest.” Her approach? “I pay the balance in full every month before the due date to avoid interest. I know the value of my points and only redeem them for high-value rewards and take advantage of bonus-point promotions.” She also isn’t afraid to negotiate annual fees. “It’s surprising what you can get if you have a conversation.”
Be strategic when spending online
Online scams are on the rise, which is why using credit for digital purchases is worth considering. “With credit, you’re not giving anyone direct access to the money in your account. If something goes wrong, your bank has formal processes to review the issue and may be able to reverse the transaction,” says Neu. When shopping online it’s a good idea to look out for payment options like Click to Pay, which add another layer of safety by masking your card details from retailers. For an extra safeguard, always shop on secure sites, avoid saving card details in browsers and set up transaction alerts so you can spot unusual activity straightaway. By understanding the tactics scammers use, a few simple habits can help make your online spending significantly safer.
