The start of a new year is usually the time we all resolve to make some positive changes in our lives, and for many of us, that New Year’s resolution includes improving our financial position.
Even though the festive season may be behind us for another year, those Christmas shopping debts are probably still lurking and January is a popular month for small personal loans to help get over the financial strain of the holiday season. That’s why it’s important to make sure your credit score is as attractive as possible – because with many lenders, your credit score will be a major factor as to whether your loan application will be approved or declined.
What is a credit score?
Your credit score is a number based on analysis of your credit file at a given point in time and is used by lenders to determine your credit worthiness. Credit reporting agencies collect your personal and financial data and document it on your credit report, to calculate your score. Under the Comprehensive or Positive Credit Reporting system, the data collected includes:
Credit scores are usually numerical and fit within bands of excellent, very good, good, average and below average. With banks and prime lenders, the higher your score, the more likely your personal loan application will be approved. The lower the score, the more likely your application will be declined.
How do I view my credit score?
There are a number of third party websites that will provide you with your credit score and credit report for free, or your can apply direct to the credit reporting body that holds your file. In Australia, the three main credit reporting bodies are: Equifax, Illion and Experian.
What factors influence my credit score?
Your credit score changes over time based on the information listed on your credit report. Importantly, your score can change due to a number of factors which may not have any impact at all on your financial situation. Your score is influenced by:
What can I do to improve my credit score?
There are many things you can do to try to improve your credit rating and it all starts by reviewing your current financial situation. Some actions you can take to improve your score include:
What can I do if there is a mistake on my credit report?
If you think there is a mistake on your credit report, in the first instance, try contacting the credit provider directly. In most cases, if there is a mistake, they will be able to quickly rectify it.
Back to that personal loan
If you are in need of a small personal loan to help get you back on track, just remember that at Safe Financial we consider applications from people with both good and bad credit scores - so check out our cash loans from $1K - $5K to find out how quick and easy it is to get your hands on some extra funds. Once a loan is approved, we can usually deposit the money into your bank account within a few hours - so you can recover from the holidays with some extra cash to pay those bills.
Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Each credit reporting bureau will have their own criteria for calculating your credit score.