"I'm in my early 30s, have a current car loan, and have missed one credit card payment in the past. However, my credit score is lower than expected and I would like to know how to improve it."
- Question from Aisling in Lismore, NSW
Top answer provided by:
Chris Smith
Hi Aisling,
Great question regarding how to improve your credit score!
Here’s my three quick tips that you can follow to improve your credit score:
1. Pay existing loans and debts on time
With any kind of debt, it’s really important to make sure you are paying on time. Late payments will negatively impact your credit score, so on time payments will ensure the credit score is not reduced.
2. Pay utility bills on time
Whilst you don’t have a ‘credit’ facility with utility providers or telcos, if you don’t pay on time, they may report your debts to a credit reporting agency. This will negatively affect your credit score, so paying all your bills on time is just as important as paying your debt repayments on time.
3. Think carefully before applying for any new credit
Whilst most people think that applying for credit would increase their credit score, the impact can be the opposite. Things like ‘Buy Now, Pay Later’ will have a negative effect on your credit score, as the assumption is that you are making short term purchases without having the savings to make these purchases without the use of credit.
In addition to these, here’s a couple of things I encourage people to consider when in their thirties:
Budgeting
Implement a budget, where you can track what you earn, what you spend, and how much you can save. Spending less than you earn is always important, regardless of how much you are earning. Saving money generally gets harder the older you get, and setting up a savings mindset will assist you in achieving your financial goals in the long term.
Financial Goals
To keep on track with your spending, setting financial goals that have a plan, timeframe and outcome can benefit you in achieving your short, medium and long term savings goals. Being able to measure your success can motivate you to keep going, especially when considering long term financial goals.
While the Adviser Ratings Website facilitates the question and answer functionality, all such communications are between users and authorised financial advisers, of which Adviser Ratings has no affiliation. Adviser Ratings is not the advice provider and does not provide financial product advice and only provides information that is general in nature.
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