How To Get The Most Out Of Your Credit This Financial Year
As the financial year draws to a close, it is the perfect time to consolidate, reflect and consider future plans. You may be seeking to jet off on that forever-planned holiday or have a stack of bills to clear before starting fresh.
But making sense of credit, including its pros and cons, can be a challenging feat. Compare & Connect's simple guide below will help to steer you in the right direction, and build the confidence you need to make the most of your credit this financial year.
Check Your Credit Score
When was the last time you checked your credit score? Do you even know what a credit score is? Rest assured, over half of all Australians have never checked their credit report, and around one in five don't even know about what's in these reports.
Once you own a credit card, checking your credit score should be part of the parcel. Lenders know these figures, so it is only fair that you do too.
A credit score varies depending on who is assessing you, but the criteria generally remains the same. Agencies will look at your past and present debt; any trouble that you have experienced when repaying that debt; and loans you have taken out.
Your bank, or a third-party financial platform can help you out.
Boost Your Credit Score
Now that you have a clearer picture about what's involved in checking your credit score, it is time to ensure it stays in the green.
There are always ways to improve your credit or renegotiate your plan to ensure that you are meeting the necessary requirements and payment dates.
You can select from a range of options to boost your credit score, and get the most of your credit for this financial year, including:
- paying down and balancing your existing debts
- increasing your credit limit, if safe to do so
- checking your reports for any errors.
In addition, you should not be too excessive in your choices. Sometimes, it is worth staying loyal to the same provider, and showing your reliability when paying bills, and not seeking out too many credit cards.
Create A Routine And Stick To It
The grass may appear to be greener on the other side, but in the world of credit, loyalty and reliability is everything.
Try and create a routine by paying your debt on time and minimising those interest payments. This means that you can reap the rewards of credit, without paying a cent.
You can also level-up by signing on for another credit card, where appropriate. Importantly, don't throw away existing cards that are not in use. By keeping them open, with no negative balance, it will favourably impact your score.
Make A Switch
If your living circumstances have changed, then maybe a routine isn't for you. The end of financial year can be the perfect time to reflect make those changes.
You may wish to shift from your existing bank or lender or strengthen your existing relationships by regularly visiting your bank, meeting with a financial advisor and showing lenders that you are a 'responsible risk'.