As adults, constantly paying bills is inevitable. Having extra expenses can be tough, especially if you do not have enough resources. This can lead to you borrowing money from different lenders, and sometimes, you just forget to pay on time. This can affect your credit score, which can eventually lead to a poor credit score.
Having bad credit score will definitely affect your status as a borrower, as lending and car finance companies usually do a background check before approving a borrower. The worse your credit standing is, the less likely that you will not be approved. However, there are definitely ways to improve your credit score, just read on to find out how.
You can always set up auto-debit on your card to avoid missing a payment. You can also keep a logbook or even a note on your laptop or mobile phone as to when your payments are due. Forgetting to pay once or twice is fine, as it normally happens. Missing multiple payments is a different story though, and this might appear habitual to some companies. Refer on this article for instructions on how to apply for auto-debit.
Having a backup or a fallback will always be your number one lifesaver. Start with a small amount, then build it up from that. This way, whenever an emergency pops up, you have somewhere to get your money from. You can start with a savings account at your trusted bank, or you can even keep a vault at home. Savings accounts usually pay higher interest rates, plus you can access or withdraw your money whenever you need it.
Do not borrow more than you can afford. Set a realistic goal or amount to pay every week, fortnight, or month, and stick to those numbers. Regularly paying with small amounts rather than paying huge amounts and missing on some payments is the better option. Regularly paying your debt goes to show that you are capable of managing your finances. You can choose to pay the minimum required payment, or you can opt to pay as much as you can each month (without having to suffer, of course, as this can only lead to more debt). Credit reporting in Australia has moved to a positive system that allows creditors to report on time.
You can always check your credit score by visiting the Credit Simple website. It’s totally free, plus it only takes about a minute to do check your credit standing. For reporting any errors regarding your credit, you can refer to this page. If you find that the matter haven’t been resolved immediately, then you can turn to the Financial Ombudsman Service for further assistance. Also, it is your right to request for a free copy of your credit file at least once a year. You may obtain it from any credit reporting agency including Veda, Dun & Brandstreet, and Experian. We highly recommend you to do this, and to check for identity theft every once in a while.
Ask if there are easier ways to pay off your debt. There are affordable payment terms that you can try, you just have to ask your creditor so they can help you get back on track. Remember, it is better to pay smaller amounts in a longer span of time, than force yourself to pay an amount that you cannot keep up with, for the sake of paying faster.
There are definitely ways to help you get back on the right path, you just have to know what to do. Good luck, we wish you the best!