Having a good credit score is essential, especially if you wish to apply for a loan. With a good credit score, you’ll have a higher chance of getting approved. On the other hand, a bad credit score can mess up your chances of getting a loan.
While losing credit score points might be easy, earning them back can prove to be more difficult. However, there are still some ways you can improve your credit score.
1. Keep Track of Your Debt
When you fail to pay your debt on time, your credit score gets affected. To prevent this, you can create a debt tracker to help you meet your payment deadlines.
When it comes to your finances, it is crucial that you stay organised. Keep tabs on each of your credit commitments and prioritise those that need immediate action.
Having an organised debt tracker can also help you identify discrepancies in your credit report. You can use it to cross-check your documents and find any inaccuracies.
2. Reduce Existing Debt
Your current debt balances play a significant role in your credit score. So, it’s best to reduce your existing debt to improve your credit score.
When you owe less money, your credit score improves. So, look at your existing debt and determine which ones you should pay off first.
3. Set Up a Payment Calendar
Your credit score can take a hit if you find yourself not paying your debts in time. Aside from having a debt tracker, you should also develop a system that will remind you when a debt payment is due soon.
If you prefer to write down all your activities and deadlines, you can mark your calendars or planner as soon as your payment deadlines are finalised. This way, it will be fresh on your mind, and you won’t forget.
If you like to keep your schedule easily accessible and synchronised across different devices, you can use a calendar app of your choice. The great thing about using apps for your payment deadlines is that you can set up alarms to remind you when a payment is due.
You can also set up an automatic payment system to ensure that you won’t miss your deadlines. Some banks can let you make scheduled payments by automatically taking money from your savings account and transferring it to your lender.
4. Regularly Check Your Credit Report
To improve your credit score, you should develop a habit of checking your credit report. Don’t just do it once a year. Instead, check your credit report multiple times a year so you can stay updated on your report. This also allows you to avoid errors and correct any inaccuracies.
When you have a bad credit score, you will have more trouble getting approved for a loan. So it’s best to find ways to improve your credit score and increase your chances of getting a loan. You can keep track of your debt, set up a payment calendar, reduce existing debt and regularly check your credit report. And, of course, make sure you always practise good financial habits to prevent a bad credit score.
While getting a loan when you have a bad credit score may be difficult, it is not impossible. If you’re wondering how to get a loan with bad credit, Wealthy You is the answer. We are an Australian mortgage company servicing Sydney that offers a variety of mortgage solutions to meet your specific financial needs. Get your loan approved today!