The credit score is one of the things that are analyzed properly by the banks and other financial lending institutions when you apply for a loan or credit. Your credit score is considered to be a measure of your creditworthiness. It shows how you have managed your loans and credit in the past and how you will be able to manage your future loans and credit obligations.
There are many different techniques or steps you can take to improve your credit score or the VedaScore in Australia. You can use the following methods yourself, to boost your credit scores:
You can start by going through your credit information. Search for any wrong information, if you find any extra charges or debts on your credit report, get it fixed as it will boost your credit score instantly. You can also open up credit card accounts and buy things that you can pay back in one month's time. Also, try to stay as far away as possible from the credit limits on your credit accounts, this also helps in improving your credit score in a very short period of time. Finally, always make credit payments on time as they play a significant role when your credit score is calculated.
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 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 ranges from 510 to 621 which is considered as a fair score when it comes to credit score.
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 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.
Other things you can do to improve your credit score
The credit score ranges from 300 (the lowest credit score possible) to as high as 850 (the highest credit score possible). Higher you credit score, greater are your chances of getting your loan or credit request accepted quickly.
However, if you are facing issues with your low credit score, following are some of the tips or techniques that you can use to improve your credit score:
You should start by minimizing your total debt. The increase in your total debt value is going to affect your credit score negatively.
You should also be very careful with your bills and other credit payments. If you pay them on time, this will gradually improve your credit score.Have a closer look at your credit balances. You do not want to cross the credit limits because they deteriorate your credit score.