How To Get A Better Credit Rating

Credit rating is the representation of the credit worth of an individual that can vary from time to time. The score is a number that is determined on the basis of your credit file. In countries like Australia, lenders like banks, credit unions and financial companies assess your credit rating before lending you the money and decide the loan amount and interest rates accordingly. Therefore, it becomes essential to learn to maintain the credit rating and also how to improve it.

Below we will describe the best ways to maintain a good credit score:

1) Pay bills on time, before due date: Though quite obvious but you need to pay your bills on time. The payment maybe delayed once but it stays on your credit file forever, no matter how small the amount maybe. Keeping an auto-debit option active for bills can be an easy solution to the problem.

2)Avoid checking on your credit score multiple times: Each time you apply for loan or credit card, the prospective credit provider checks your credit report which deducts points off your credit score with every check, this is termed as a hard enquiry  as opposed to soft enquiry when enquire on your own credit report. Too many inquiries on the credit report reflects a bad image on finance firms.

3) Clearing debts on regular basis: Clearing off payments on the debt regularly demonstrates your capability to manage your money, this means at least paying the minimum due payment for your credit card or loan installment on time. This greatly improves the credit score and also reduces the interest rates.

4) Avoid having unused credit cards:  We tend to apply credit cards for the sake of having them in the rat race but when these are not used for a long period of time, it is unfavorable for a healthy credit rating, as it does not reflect that you are building up any credit history or add to your quality as reliable debtor to control your finances.