Top 5 things that hurt your credit score
Building your credit score can involve some work. Don’t unravel it by making these 5 mistakes.
1. Paying late
Any late payments can decrease your credit score. Both positive and negative repayment behaviour goes on your credit report and if you consistently pay late, this will stand out. Make sure you pay all your bills on time.
2. Making too many credit applications
Put simply, the more credit you apply for (including utilities accounts) in a short space of time, the lower your score will probably become. Don’t apply for credit unless you need it and try to determine if you’re likely to be accepted before applying.
Any default listed against your name, such as an overdue payment to a credit provider greater than $150 is a red flag against your credit score.
4. Not having any credit
Lenders can’t tell if you’re a responsible borrower unless you have some form of credit history. However, you can build this over time.
Ways to do this can include registering a utility account in your name, switching from a prepaid to postpaid mobile phone plan and getting a low-cost credit card (and of course, paying all of your bills on time).
5. Not identifying credit report errors
Last, but not least, check your credit report for any reporting errors. Mistakes can happen.
If you spot anything wrong on your report, such as disputed default with any credit provider, you can speak to the provider itself, or go through the disputes section within the Credit Simple website to rectify this.