Do you know your credit score?

Do you know your credit score?

Having a good credit score can help you in many ways – including reducing the cost of your bills or giving you access to more cost-effective interest rates.

But as important as a good credit score can be, we often tend to put it in the ‘too hard basket,’ or simply don’t know how to check it and what to do with it. So here we look at some key steps you can take to stay on top of your credit score and, most importantly, make it work for your goals.

Credit Score

What is your credit score?

If you’d like to give your credit score a healthy boost, understanding your rating is a good place to start.

You can request a copy of your credit report to any (or all) of the three credit reporting agencies in New Zealand:
Equifax
illion
Centrix

Keep in mind that, depending on the agencies you choose, your credit score will be a number between 0 and 1,000 (illion and Equifax) or 0 and 1,500 (Centrix). To get a clearer idea of what this number looks like, you can also join Credit Simple. Owned by illion, this free online tool provides instant access to your credit report, along with tips and insights to take control of your financial life.

How to improve your credit score

One of the key things to know about credit scores is this: they go up and down based on many factors, including your payment history. Just to give you a couple of examples, paying your bills on time can help your credit score stay higher, while applying too often for finance can have a negative impact.

So what’s affecting your credit score? Your Credit Report has the answer. It includes details of your debts, defaults and balances, and can give you a better understanding of what’s happening to your score and why. Then, you can create your ‘action plan.’

Do you have any unpaid defaults, for example? It’s a common issue, and being proactive about it can really help. Make sure you contact your provider to make them aware of the situation: they will be happy to work with you on a possible strategy.

Being proactive is important for late payments, too. If you often feel that you are playing catch-up and missing out due dates, it’s a good idea to give your payment behaviour some thought. For example, setting up automatic payments is one of the easiest ways to stay on track, but take the time to understand what works best for you.

With a bit of focus and planning, you can make your credit score work for you. And remember, your credit score is not a still snapshot; it changes as your circumstances change. By following its fluctuations over time, you can take action more quickly, and make sure that your rating is ready for your short and long-term goals.

Like to know more? Click the links below for additional information on credit scores:
Equifax
Credit Simple
Centrix
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Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure the content is correct, the information provided is subject to continuous change. Please use your discretion and seek independent guidance before making any decisions based on the information provided in this article.