Pay your bills on time
If you’ve already got a ‘good’, ‘very good’, or ‘excellent’ credit score, you may already be a dab hand at paying your bills in full and on time. Continuing to do so consistently may help you maintain and improve your credit score, and enhance your position as a reliable lending prospect in the eyes of lenders.
To help stay on track, it may be a good idea to consider building up a ‘buffer fund’ of savings, to ensure that you can pay your bills even at times of the year when you have lots of other expenses, or in case your day-to-day finances are stretched unexpectedly.
The table below displays a snapshot of savings accounts on Canstar’s database, based on a regular saver in NSW with $1,000 in savings. Results have been sorted by Star Rating (highest to lowest), and then by provider name (alphabetically). If you are considering a particular savings account, check upfront with your provider and read their terms and conditions to confirm whether the product meets your needs.
Continue to demonstrate that you can manage credit
If you’ve gotten your credit score to at least ‘good’ while making responsible use of a credit card or other line of credit, you may want to consider keeping them open, should this suit your circumstances. Ongoing, responsible use of a credit facility is typically viewed positively by lenders and credit reporting agencies, as it demonstrates that you can manage your spending and debt responsibly.
That being said, because of the introduction of Comprehensive Credit Reporting in Australia, closing unnecessary credit accounts can also have a positive impact on your credit score.
It’s worth remembering, though, that opening and closing credit accounts too often may be viewed negatively.
Make progress on paying down your debt
It’s possible to have a ‘good’, ‘very good’, or ‘excellent’ credit score while also having outstanding debt, such as a mortgage or personal loan. Evidence that you’re making steady progress towards repaying your debt is what lenders are likely to be looking for if this is the case.
And while it may not be feasible to get it fully paid off in the near future, demonstrating the ability to make regular, consistent repayments towards your debt is a sign that you’re a responsible borrower and may be a safe lending prospect.
If your existing debt is on a credit card, which typically comes with a higher interest rate than other credit products, you could consider making use of a balance transfer to move the debt to a card with a lower interest rate. You can read about whether or not a balance transfer could be right for you here.
The table below displays a snapshot of low-rate credit cards with $0 annual fee and 0% balance transfer offers on Canstar’s database, based on a monthly spend of $500. These results are sorted by purchase rate (lowest to highest), then provider name (alphabetically). Before committing to a particular credit card, check upfront with your provider and read any of their terms and conditions to confirm the details of their balance transfer offer and whether the card meets your needs.
Be careful when applying for additional credit
Considering your favourable current credit score, you may feel confident taking out additional credit products – say a second credit card or another loan. But it’s worth remembering that each application for credit typically involves what’s called a ‘hard check’ on your credit score by the lender assessing your application.
As we explain here, hard checks are recorded on your credit history and are taken into consideration when calculating your credit score.
Multiple hard checks in a relatively short period may negatively affect your credit score, as it could be viewed as evidence that you are borrowing too much. So it may be worth carefully considering each additional credit application you make.
Keep an eye on your credit report
Another important consideration when it comes to protecting your credit score is making sure nothing incorrect is being recorded on your credit report.
For example, if you’re the victim of identity theft or credit card fraud, the financial fallout can have an impact not just on your bank account, but your credit score as well.
It may be a good idea to thoroughly check your credit report on a regular basis. This could help ensure that any fraudulent or incorrect listings on your credit report can be reported and investigated ASAP, potentially preventing them from doing any serious or long-lasting damage to your credit score.
If you want to check your credit score, learn how they work, or find out more about improving your score, visit our credit score information hub.