Have you applied for car finance recently but did not get approved because of bad credit? There are numerous factors that can affect your application for loans or a new line of credit, and among these factors, your credit standing plays a crucial role.
While you may have met all the other requirements but still can’t figure out why your loan application gets declined, it may be time to take a close look at your credit score.
When you have a less than stellar credit, it may seem like you’ve dug yourself into a deep, dark hole that you couldn’t get out of. However, you shouldn’t feel disheartened because there are simple ways you can do to improve your credit rating.
While the road to recovery is not easy, the good news is, it’s not impossible. But it will take plenty of effort and discipline on your part. So, to help you get started, here are several things you can do right now to get your credit standing back in good shape.
Check your credit report.
Remember when you were in school? If your parents wanted to know how your grades were doing, they would ask to see your report card. Improving your credit rating is basically the same thing. You can start by getting a copy of your credit history.
Just check online and look for sites, like creditsimple.com.au or creditsavvy.com.au, which offer this kind of service. It’s completely free, fast, and easy.
Look for possible errors.
If you think there are some mistakes on your credit report, you should carefully examine them and dispute these errors when necessary. The good news is that most credit bureaus and credit providers have set up a standard process to handle disputes for errors found on credit reports.
Pay your bills on time.
Staying on top of your finances can be overwhelming at times. But it’s very important that you track all your bills and pay them on time. Missing payments can put a dent on your credit standing and lower your credit score over time.
Usually, when you forget to pay a bill, after 30 days, a credit bureau will be notified, and this may affect your credit rating. So, to avoid this, you can set up arrangements like an automatic payment system from your bank to make sure you never fail to pay your bills on time.
Reduce your credit card balance.
One of the effective ways you can boost your credit standing is to pay down your credit card balances. If possible, keep your balances low, even those small balances as they may become a nuisance over time, especially if you have more than one credit card. This way, you can avoid saturating your credit report so many balances.
Use credit to your advantage.
While it may seem counter-intuitive to have outstanding credit, when you consistently pay them and avoid defaulting, this will have a positive impact on your credit score. When you show that you are not falling behind on your payments, it will show that you are a responsible borrower and can be trusted because you can pay your debts.
These are just some of the simple ways to get your credit standing in better shape. When you have reached a point where your credit rating is at a good spot, your chances of getting approved for loans will be higher than before.
Have you found other ways to improve your credit rating? If so, we’d love to hear from you. Please share your tips by leaving a comment, so that others may benefit.