Find out the ways on how you can fix your credit score in Australia.

How can I improve my credit score in Australia is one of the most common questions of people who are having a hard time getting approved.

Your credit score is one of the biggest factors when it comes to lending companies and many financial institutions today. People with excellent scores can easily be granted a loan, while the ones who have low credit scores are often declined or given a high-interest rate. If you are experiencing the latter, then knowing how you can improve your score is essential.

Paying On Time

The first thing that you need to do is always to pay your bills on time. If you are too busy to pay your bills, would be best to set up an alarm for each of the bills that you have. In this way, you won't miss a payment.

Monitoring Your Credit Report

The next thing that you need to do is to start monitoring your credit report. The reason behind this is because there might be errors that can affect your score. If you notice any errors, you should immediately report it so they can correct the problem and increase your score.

What is a credit score in Australia

What is a credit score in Australia, you may ask? Find out more about it by reading the information below.

A credit score in Australia is important when applying for a loan or credit. The reason behind this is because the lending companies and bank use this as a basis whether they should approve your application or reconsider you by asking for more requirements.

Accessing Your Score

There are now a lot of websites that can help you check your credit score for free. All you need to do is to provide your name, email address, home address, contact number and your Social Security Number's last four digits.

Accessing Your FICO

It would also be essential to check your FICO since most lenders are using it to check your score. You can get a free report, so you don't have to spend anything to know your FICO score.

How are credit scores calculated in Australia?

The credit score helps the lenders or financial institutions in assessing your credit history and creditworthiness in Australia. Using your credit score, the lenders in Australia will determine the risk aspect involved in lending you loans such as home loans or mortgage.

Different aspects are taken into consideration to calculate your credit score. Some of the major points include the following:

First, your default history is considered. Default history includes your overdue payments and payment defaults. Second, the number of inquiries made by lenders or the credit providers. Third, the number of credit-related inquiries that you have done in the past 12 months period. Finally, your overall credit acquiring pattern in the past.

The different percentages are allotted to the characteristicredit score mentioned above and possibility of adverse events, which is your credit default, listed for the next 12 months on your Veda Credit file.

Explanation of credit score ranges in Australia

There are different explanation of credit score ranges in Australia. Find out by reading the information below.

Australia has credit score ranges that you should know, for you to be able to get familiar with it. Here is the credit score information that you need to know in Australia.

Below Average

Below average score ranges from 0 to 509; wherein you are known to be included in the 20% of the population who are at the bottom.

Average

Average ranges from 510 to 621 which is considered as a fair score when it comes to credit score.

Very Good

Very good ranges from 726 to 832. Almost 80% of the population has this score and is known as the second highest score to achieve.

Excellent

Excellent ranges from 833 to 1200. People with this score can easily avail of loans and credit cards.

How to improve your credit score in Australia

You need to have an active credit card. Lenders are wary of borrowers that have zero or no credit history. You need to pay your bills and other credit payments on time. It shows on your credit report and eye catching for the lenders that look into your credit reports before giving approval to your loan application.

Avoid additional hard credit inquiries. A hard inquiry is one which involves financial institutions and banks requesting for your credit reports. Because ?hard inquiries' take off a few points, from your overall credit score or your FICO score.

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