In many respects, we are seeing the way in which we live in each day in Australia change rapidly. Businesses move more towards online operations, digital growth is now a part of our economy, and the internet and globalisation are set to bring further changes in the time ahead.
Some things don’t change, however – and the value of a good credit score is one of them. This is especially apparent if you find yourself with a downgraded one. A mistake may be easy to make, but ‘you don’t know what you’ve got till it’s gone’ rings true when you find the road to getting loans, making financial applications – and crucially: getting freebies and offers by your lender – is all limited by a bad credit score. So, how to improve it? Here are 5 tips you need to follow.
I. Acknowledge the mistake
Rather than ignore it, once you’ve learned your credit score has been downgraded contact your lender right away. Oftentimes they have a grace period or ability to excuse a debt upon request – and while there’s no guarantee such an option shall always be on the table – ignoring it altogether is certain to be more damaging in the long term.
II. Don’t argue about it.
Alongside acknowledging your mistake, it’s important to recognise a wrong has occurred. This doesn’t mean you need to bring your local banker roses and chocolates but instead does mean being argumentative or belligerent about it is only going to make it worse. Being polite goes a long way, and you’ll find this is true when negotiating a deal to get your credit score fixed.
III. Fix it as soon as possible
Once you have a clear path to fix your credit score its then time to fix it as soon as possible. This may mean cutting a couple of expenses – it may mean cutting quite a lot – but the sooner your credit score is fixed the faster you can get your finances in order. Once your credit score is fixed, you can then begin to ease up on the belt-tightening.
IV. Don’t let it happen again
While mistakes happen it is vital you learn from them. This is especially true for your credit score. While different banks and lenders look at different timelines for your credit history, it’s certain a one-off mistake shall be looked upon far more favorably than multiple missteps. Once you’ve begun the work of credit repair, be sure to set in place a plan to avoid going into debt again.
V. Learn from it
Avoiding a bad credit score is not just a matter of staying out of trouble, it is also about the opportunity to build your financial security and wealth. As long as you are in debt to others you’ll struggle to build up your own wealth and investments. So, once you have a plan in place for your credit repair, thereafter seek out a financial advisor to build a budget plan and path to wealth that guarantees you’ll smile rather than frown when looking at your next bank statement.