How do I improve my credit score quickly? 

A credit rating is information that helps lenders assess the creditworthiness of any type of loan. Creditworthiness takes into account the likelihood that you will pay your bills on time and pay off the loan in full. There are many inputs used to determine this rating. These include:

• Your payment history
• The amount owed
• Length of your credit history
• The amount you are trying to borrow
• Other loans you have taken previously

New Zealand credit bureaus determine your credit rating and provide this information upon request from the lender. Your authorisation is required for the lender to request a copy of your credit information which is provided as a terms and conditions agreement, even if you have an impeccable history of paying off debt. Always use a lender with no hidden costs.

A bad credit rating can be caused by late payments on your credit card or loan or non-compliance with payments. A negative rating could negatively affect your ability to borrow in the future. If you are having financial problems and your debts are no longer manageable, it is important to contact your lender(s) as soon as possible to inform them of a change in the situation and ask for help. It’s better to be honest with the facts than to repeatedly miss payments without giving a reason.

If you do have a bad credit rating, it is possible to improve your score over time. The first step is to pay off your debts. Repayment history allows you to demonstrate that you have recovered your credit behaviour by showing a clear record of repayment over a specific period of time.

There are the best steps to raise your credit score quickly:

• Pay off debts
• Dispute credit report errors
• Get a copy of your credit reports
• Leave old accounts open
• Avoid new credit card purchases

Over time, as recent payment plans become more relevant, previous credit issues may become less relevant to your credit score. Within five years, deficiencies will still have a negative impact on your performance, but if you show subsequent improvements in behaviour, their impact will be reduced.

If you are not sure what your credit rating is or what is on your report, you can contact a credit agency and request your personal information. You can check the accuracy of the information and that no one else has used your identity to obtain a loan. If you feel that your result may not be as good as you would like, remember that you can always go back.

Clare Louise