5 Tips To Maintain a Healthy Credit Score
In Australia, credit scores ranging from 500 to 699 are considered average, while 700 and above are categorized as good or excellent. A perfect credit score is 1,000, but only around 3.5% of borrowers achieve this rare feat. A score of 1,000 is akin to a financial unicorn.
Keep in mind that maintaining a healthy credit score is important if you are considering applying for loans and credit cards. An excellent credit score means lower interest rates, fees and more favorable terms.
To keep things simple, here are 5 of our top tips to maintain a healthy credit score:
Pay Bills Promptly
Timely bill payments are the cornerstone of a good credit score. Set up reminders or automatic payments to ensure you never miss a due date. Consistent on-time payments demonstrate responsible financial behavior.
Budget Wisely
Manage your finances wisely by avoiding unnecessary expenditures. Staying within your credit limits shows lenders that you're a responsible borrower. Overspending can lead to debt, affecting your credit score negatively. Keep balances low and don't constantly max out limits.
Review Your Credit Report Regularly
Obtain your credit reports from Equifax, Experian, or Illion. Carefully scrutinize each report for accuracy. If you spot errors, reach out to the credit reporting agency to rectify them as soon as possible.
Limit Credit Applications
Be cautious about applying for too much credit. Numerous credit applications can raise questions about your ability to manage multiple accounts. Apply for new credit only when absolutely necessary. Consult a mortgage broker so they can shop for rates and run calculations on your behalf.
Have a Mix of Credit Types
Have some installment loans (mortgage, car, personal) and revolving accounts (credit cards) to demonstrate managing different credit lines.
At Investors Mortgage, we understand the importance of a healthy credit score in securing your financial future. Our team is here to support you on your journey to maintaining and improving your credit health. Whether you're a seasoned pro or just starting, count on us to provide expert guidance tailored to your unique situation.
Remember, building and sustaining a strong credit score is a gradual process. With discipline and the right financial habits, you can position yourself for favorable loan terms, lower interest rates, and greater financial opportunities.
We've got your back – let's build that solid credit foundation together!
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