At Fix My Credit, we believe it’s essential to understand the importance of credit to ensure you’re making the right financial decisions and achieving financial success in your life. Let’s look more into credit scores and why they are important.
Also known as a credit rating, it’s like a school report card. Normally, you’re given a rating between zero and 1,000 (or 1,200) indicating to financial institutions how worthy you are to borrow money or apply for credit. Higher credit scores improve your eligibility for loans and credit; lower credit scores make it harder for you to borrow.
Credit reporting bodies such as Equifax, Illion and Experian generate your credit report from credit reports sent to them from various other credit providers.
Here are some reasons why good credit is important:
In Australia, like most of the world, lenders will look at your credit rating before they approve a loan or credit card. Your credit history will show your credit accounts, payment history and any outstanding debts. Lenders will check this history to determine if you’re a good candidate for the loan or credit card you are applying for.
A good credit score makes you more likely to be approved for loans and credit cards. The bank or lender will see that you’re good at managing repayments and are responsible for your debts.
Bad credit can limit your options when obtaining finance, as less lenders will want to lend to a high-risk borrower. This may force you to apply for loans with higher interest rates and less favourable terms, costing you more money in the long-term.
If you have a good credit rating, there’s a bigger chance that you’ll get approved for a loan or credit with lower interest rates and reasonable terms. This can save you money in the long term on bigger purchases, like homes, properties and cars.
If you have a bad credit score, the lender will identify you as a high-risk borrower, and they are less likely to approve your loan or credit card. If they do, interest rates may be higher as they cover the risk of lending money to a high-risk borrower.
If you’re ready to buy your first home, banks and mortgage lenders will look at you more favourably if you have a good credit score. Your credit score is a determining factor in whether they approve your loan application or not. It will also help you secure the lowest interest rate possible.
Did you know real estate agents can ask to access your credit report when conducting checks when you apply to rent a property? In some cases, a landlord may request to see your credit report to determine if you’re a good candidate for leasing their property.
Having good credit affects your financial freedom. It enables you to access higher credit limits and, in some cases, credit card reward programs that offer incentives or cashback.
Many Australians don’t realise it’s possible to fix your credit. Credit repair experts, like the team here at Fix My Credit are experienced and can help with credit restoration in Australia. Our team has spent years developing various skills and acquiring in-depth knowledge that enables them to help with bad credit ratings.
We’ll pull a full credit report so we can check what lenders are seeing when you apply for credit. Once we know more about your credit history, we can create a strategy to get you back on track and achieve a healthy credit score as soon as possible.
Other financial services we offer at Fix My Credit, include:
At Fix My Credit, we have a long history of helping Australians fix their bad credit. For more information, complete our quick contact form and we’ll get in touch with you as soon as possible.
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