Three surprising things that affect your credit rating

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Making ends meet can be really tough, especially if you’re unemployed, on government benefits, a student or earning a low income. Sometimes you need a fast cash loan to see you through a rough patch, or to wrap up lots of little expenses into one easy repayment.

When you want to apply for a small cash loan, it pays to get your financial records organised. But many people overlook the one thing that can make a big difference – your credit score.

First of all – what is your credit score?

Anyone who has ever applied for or used any kind of credit will have a credit file.

  • This file doesn’t have a ‘good’ or ‘bad’ rating. It simply lists your credit information, along with a credit ‘score’ between 1 and 1200.
  • When you apply for credit or a loan, a credit check will be run on your financial details.
  • This check will indicate information such as previous applications you’ve made for credit, and any overdue payments.
  • Each lender has their own policies that they’ll consider when reviewing your credit history. A ‘bad’ credit rating doesn’t always mean they won’t grant you that fast cash loan.

Want to know your credit score? Run your own free credit check

Many of us don’t know how healthy our credit rating is. In fact, industry research shows almost eight out of ten Australians have never checked their credit report.

So – what affects your credit score?

Here’s 3 surprising things that will affect your credit rating.

  1. Making multiple loan applications

When you need access to some fast cash to see you through a rough patch or to pay for some unexpected surprises, it can be tempting to submit loan applications to a wide range of lenders in the hope that at least one of them will offer you a loan.

  • Resist the temptation! Every time you make a loan application it’s noted in your credit report.
  • It doesn’t look great when your record indicates multiple loan applications. It can create the impression that you may have been rejected by banks and other lenders.
  1. Paying bills late – or not at all

Not only does paying your bills on time make good financial sense, it also keeps your credit score healthy.

  • Late repayments on loans or credit cards, overdue or unpaid bills – it’s all going to show up on your credit file. And it doesn’t paint a great picture for lenders who are reviewing your loan application.
  • The best way to protect your record is to pay your bills on time, every time.
  • And when you’re stuck and are low on cash, at the very least always make whatever payment you can afford by the due date, and contact the bill provider to negotiate a payment plan for the remainder.
  1. Not keeping tabs on your credit rating

As you can see – it’s important that you look after your credit score, as it can help determine your ability to apply for future credit.

  • Conduct a free credit check once a year to see how you’re tracking.
  • This will enable you to pick up and correct any mistakes that may be on your credit file, remind you to update your contact details, and help to identify any possible attempts at identify fraud.

We’re here to help you clean up your credit check

Whether you’re unemployed, on government benefits, a student or earning a low income, you can start cleaning up your credit rating today.

Need help overcoming a financial hurdle or applying for a debt consolidation loan? For a chat and some helpful advice, just pop in and visit our friendly staff at your local City Finance branch, or call us on 1300 34 62 62 (FINANCE).