When assessing applications for finance, lenders are becoming more and more reliant on the use of credit scoring before issuing an approval. It is important to better understand what impacts your score because the more you know about your credit score, the more tools you have to improve and maintain it.
There are three common mistakes people make that can have an impact your score, but get on top of them and you are well on your way to building a fit and healthy credit score.
Shopping around for credit
Many borrowers fall into the trap of applying for numerous loans to comparison shop. While there is nothing wrong with applying for a loan, completing many applications in a short period of time may negatively impact your score. Speaking to your mortgage broker is a useful resource for borrowers in search of a better deal.
The balance transfer trap
Balance transfer deals are highly advertised and can be very enticing. However, if you find yourself continuously rolling one card into another in a short period of time, you may be pushing your score in the wrong direction. If your goal is to consolidate your debt and drive it down over time, a low interest, fixed rate personal loan may be a better alternative.
The cost of late repayments
This is not uncommon but did you know missing your phone bill can cost you more than a late fee? Defaulting on utility bills or loan repayments is a sure-fire way to lower your credit score. The trick here is to budget and ensure you are looking to the future and planning your commitments in advance.
If you are looking for a home loan or would like any further information regarding your credit file, please call Ashley on 0425 826 967 or 9432-2121