Top 10 tips to improve your credit score

1. Review your credit file

You can request your credit file for free via mycreditfile.com.au.

Let us know if you would like us to take a look and talk you through what the report means. Our brokers, Rebecca, Sharon and Sid can help

2. Address any errors on your credit file

Many Australians have errors on their file. It might be identity theft, or just a simple mistake by the lender.

If there’s a mistake on your report, you’ll need to contact:

· the credit provider who listed it

· the credit reporting agency who produced the report

· the office of the Privacy Commissioner – if needed.

3. Create a relationship with a bank

A bank will want to see that you have capacity to repay any loan that you apply for. If you have money regularly coming in and savings building up they are more likely to see you as a a good risk for a loan.

4. Responsibly manage a credit card

Sometimes it can be good to have a credit card to show the lender that you can use credit sensibly and operate it within your means. This can be used as evidence of your ability to manage debt. It doesn't have to be a high limit - always aim to keep it manageable as patchy credit card history will come up on your credit file and may hinder your chances of getting a loan.

5. Don’t make too many applications for short term debts

Each credit application you make is added to your file and lowers your score. Why? Because too-frequent applications can be a sign of financial desperation.

Short term finance can include credit cards, personal loans and car finance.

6. Pay your credit card and loans on time

Set up a direct debit payment to automatically pay your credit cards another loans each month. Keep your bank accounts simple so you always have money in the right place. If you are late on payments this will appear on your credit file for two years and you will need to explain this to the lender when you apply for finance.

7. Pay your bills on time

Your service provider, like your phone company, can list bad payment history on your credit file. Keep on top of your bills and if you do have trouble making payments be sure to contact them before it becomes an issue.

8. Use a variety of credit types

If you’re able to successfully manage several debts at one time - like for example, a credit card, car loan and mortgage - your credit score will rise.

9. Don’t apply for finance you don't need

Sometimes you will need finance temporarily - like for surgery or an unexpected big purchase. If you do use a credit card for these types of items pay it off as quickly as possible. If you can manage your money responsibly while keeping the card open it may help you in long run. You don't want to make too many applications for short term finance if you can avoid it so having this card as an emergency back up might be a good idea.

10. Stability can be key

When applying for finance lenders will want to know things like how long you have been in job, how long you have been at your address. They are looking to understand if you are a stable character.