How can I improve my credit score?

How can I improve my credit score?

How creditworthy are you? Even seemingly minor things like missing a single mobile phone payment or applying for a few credit cards at once can negatively impact your borrowing capacity.

But don’t despair; there are many ways you can improve your credit rating in New Zealand, even if you’ve made a few mistakes in the past.

More than one-third of New Zealanders are either struggling financially or just about getting by.

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The best way to have a perfect score is to never apply for credit in the first place, right? Wrong. Lenders look at your credit history to see how responsible you are when borrowing. If you have no credit footprint, they may see you as a risk that’s not worth taking.

Always pay bills on time

Perhaps the most important piece of advice for improving your credit rating is to always – and we mean always – pay outstanding debts on or before the due date. Utility bills, loans, credit cards, mortgages and more – every time you pay punctually, your credit rating will thank you.

Lower your credit card debt

More than one-third of New Zealanders are either struggling financially or just about getting by, so it’s unsurprising that many people turn to credit cards in their time of need. However, keeping your balances as low as possible on your credit cards will do your credit score wonders, so be mindful of any unnecessary spending and – if possible – pay everything off at the end of each month.

Avoid getting a default listing

Have you missed a payment for over 30 days and the lender took steps to recover the debt? You probably have a default on your credit report. These remain on your credit rating for up to five years, which may hamper your chances of obtaining a mortgage or loan in the future.

Don’t apply for too much credit at once

We’ve already told you that never applying for credit is a bad idea, but applying for too much is also a no-no. Confusing isn’t it? But, similar to the Goldilocks fairy tale, the key is to get it just right. If you apply for several loans and credit cards over a short space of time, you’ll look desperate for money, which won’t work in your favour. Instead, research the best deals and apply where you’re most likely to succeed.

Ultimately, your credit rating won’t skyrocket overnight, but you should be able to improve your score with these tips and pick up some useful money management habits for the future at the same time.

Credit Simple
Credit Simple

This is where the author bios usually go, but Credit Simple is not an actual human being, so we can't write a bio for them. However, if Credit Simple were a human being, we'd like to think they'd be Dai Henwood. Dreams are free.

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