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How to improve your credit score

How to improve your credit score

Whether it’s to buy or renovate a home, afford the holiday of a lifetime or get some new wheels, it’s likely you’ll need to borrow money at some point in your life.

Lenders need to make sure you’re in good financial shape before they approve your request to borrow money. One of the things they look at is your overall credit history, captured as a credit score.

Your credit score is a reflection of how well you’re managing your finances at a given moment in time. The higher the score, the more likely you’ll be approved for credit. Discover how to get your credit score.

The good news is that you can always improve your credit score. 

1. Pay bills on time

Missing the odd deadline or two, happens. But if this becomes a habit, your credit score may take a hit.

It’s important to keep track of bills and upcoming payments so you can anticipate when a bill’s due to arrive and roughly how much it will be. That way you can make sure you’ve enough in the bank to pay it on time.

Here’s how with CommBank: You can get bills sent directly to you in NetBank and the CommBank app. So you can see, keep track and pay them in one place.

You can also set up automatic bill and credit card payments so you never miss a payment again (and avoid being stung by late payment fees).

2. Build up your savings

Having a buffer as a ‘just-in-case’ not only gives you reassurance if the unexpected happens, but can help with your credit score by giving you the flexibility to always pay your bills on time.

Savings accounts often pay higher interest rates than transaction accounts (unless you lock your money in for a fixed term) and enable you to access your money when you really need it.

Here’s how with CommBank: Set a savings goal in NetBank and give it a nickname, it will help you stay motivated to save. 

3. Regularly pay off debt

Debt isn’t necessarily a bad thing, so long as you’re in control of it. Demonstrating you regularly pay off your debt shows you're capable of managing your money. This means meeting at least the minimum repayments due on any personal loans or credit cards by the due date each month.

While you may only have to make the minimum payment, paying off as much as you can reasonably afford every month may reduce interest charges and can improve your credit score. If you've racked up multiple debts and are feeling overwhelmed there are a few different ways you can being tackling them.

Here’s how with CommBank: We offer free financial health checks in branch and over the phone. You can also get in touch with our Customer Assist Team who can offer you help and support if your circumstances have unexpectedly changed.

 

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice.