Lenders such as banks and finance companies will be checking your credit report to see if you regularly pay your bills on time.Late payments can be tracked on your credit report, and regular late payments will reduce your credit score over time. Keeping to a budget and scheduling automatic payments can help you make payments on time and maintain a good credit score.
Tip Three: Pay any existing credit defaults
Start paying off any outstanding defaults. A default will stay on your file for five years, but over time the impact the default has on your score will reduce and your credit score will start to improve.
Having trouble paying on time?
If for any reason you have a cashflow disruption, you can try to negotiate extended payment terms with your credit provider upfront to reduce any impact to your credit score.
If you find yourself regularly missing repayments, it is worth reviewing your finances. There are free budgeting tools available through sorted.org.nz, or you can approach moneytalks.co.nz to speak with a financial mentor.
Whether it’s applying for a credit card, taking out a mortgage to purchase a home, or setting up an account with a telco or electricity company, any time you open an account with a business or service provider, it contributes to your credit score. Here are our top tips for ways you can improve your credit score:
Tip One: Check your current credit score
Your credit score is a number between zero and 1,000 that indicates how likely you are to pay your bills on time. Your credit score can be found on your credit report, which is a summary of your payment history over the past 24 months.You can apply for your personal credit report for free, to get an understanding of your credit score via the Centrix website, my credit score.
Tip Two: Pay your bills on time