7 Wisr Ways To Improve Your Credit Score

At Wisr we provide you with the tools to help you on your path towards financial wellness. We’ve come up with six helpful tips to help you stay on track and improve your credit score. It’s up to you whether you choose to adopt or maintain the wiser habits suggested below.

When it comes to shopping around for a personal loan, getting the best rate is an important factor that many borrowers raise as a deciding factor. 

But did you know that each of these application enquiries could reduce your chances of getting a loan?

When you make a credit enquiry for a loan or a credit card the enquiry is recorded on your credit report, even if the enquiry does not eventuate to an application. Even purchasing a new phone or connecting with a new utility company can impact your credit report.

The type of credit enquiries can impact also impact your credit score. For example a short-term loan or car finance is seen as riskier than a home mortgage or HECS debt.

These applications can have a significant impact on your credit score, submitting several loan applications to multiple lenders with the hope that one will be approved can be detrimental to your credit score. 

Credit reporting bureaus (CRBs) such as Equifax, Experian and Illion will keep all this information on record on file from the past five years. 

To help reduce your risk always abide by the “six-month rule”, meaning that you limit yourself to just one or two credit enquiries every six months. 

It is also worth using online calculator and comparison tools to research financial decisions before submitting a formal application. These queries won’t impact your credit record and mean you will only apply for the financial products that suit you.

Even the most organised people sometimes forget to pay their bills on time. Ever been on the hustle to pay off those overdue bills? It’s an experience most Australians can relate with. 

What most people don’t realise is the damage that this can cause on your credit score. Late payments for bills over 14 days for credit cards, personal loans, auto finance and mortgages going back two years can have a negative impact and lower your credit report. 

Once a payment is over 60 days late and $150 or more then it will be     recorded as a default (overdue debt) on your credit file.

It is important to always pay your bills on time and if there ever is a problem, make sure it can be paid within 60 days so it is not included on your credit file as a default. 

A direct debit is a great way to make sure you don’t have to worry about remembering to pay your bills on time.

If you default on a bill that is more than $150 and you have been given written notice, this will be recorded on your credit file. This overdue payment will be recorded as a default and will be kept on your credit file for five years.

Fraudulently obtaining credit, not making payments and not being contactable for six months with regards to your debt will be classified as a serious credit infringement. This credit infringement is likely to remain on your credit record for seven years.

More than three defaults and up to three credit enquiries classifies you as a high-risk borrower. This could seriously limit your 

If you can’t pay your bills or meet repayments due to unexpected circumstances, speak with your utilities and credit providers and see if you can apply for a hardship variation and negotiate a repayment plan. 

When moving house, remember to forward mail so that you don’t miss any payments. Wiser recommends opting to receive your bills via email and turning on your notifications on your mobile and tablet whenever the monthly bill arrives.

You are entitled to obtain one free copy of your credit report per year from each of the major credit reporting agencies (Equifax, Experian and Illion).

Even if you believe you do not have any negative information on your file, it is still wise to check it, as there could be errors. 

Having a look at your credit report will give the opportunity to address any potential issues. Some of these errors may be payments that have been made which have not been recorded by your credit provider. 

If any information on your credit report is incorrect it is important to fix it straight away otherwise future credit applications will be affected. 

Credit repair is completely free. Don’t fall for offers from companies that promise to repair your credit file. It may sound like a great idea having someone else doing all the work – however with this comes a costly fee. 

Be wiser and repair your credit yourself. Fixing your credit score yourself allows you have a look at your credit report yourself. This helps you to obtain a better understanding of your habits and personal credit history.

Credit providers and credit reporting bodies must with 30 days investigate and respond to consumers that believe there is an error on their report, under the Privacy Act and Privacy (Credit Reporting) Code.

If the error is not removed and you believe that it should be then you can lodge a dispute with the credit provider’s or credit reporting body’s External Dispute Resolution scheme, which is independent, and free for consumers to use.  

Other options for advice includes going to a financial counsellor or seeking assistance from community legal services, which are free, independent and confidential. ^[1]

No, we’re not recommending you go on a huge shopping spree.

Having an active credit account means using your credit card responsibly and paying off credit in time. This will better increase your credit score and show to lenders that you are capable of handling and managing debt.

If you have paid off your credit card and have no negative reports, as long as you can maintain a small debt, you can keep the card open rather than closing it. 

If you don’t have credit history then lenders are less likely to lend, as they are unable to determine if you will be a responsible borrower and will consider you high risk as a borrower. 

It’s also good to have a proven track record that shows you can meet repayments of any credit outstanding, including mobile phone plans, an internet account, utility accounts as well as store cards registered to your name and address.

It’s usually  more manageable to have one credit card with a reasonable limit opposed to multiple credit cards. Treat any credit card account as having the potential to favourably impact your credit score by being a responsible borrower. Make sure your have active accounts in your name and address.

When you try juggling repayments for multiple debts, this can lead to missing payments or worse not having the sufficient funds needed to cover the payment.

Reducing your debt may be helpful to your credit rating in the long run, although having open lines of credit is beneficial to your credit rating as long as you don’t reach the limits. 

If your credit file is free from any negative listings and defaults, then your bargaining power may lead to a lower cost way of managing your debts.

Consolidating several loans with high interest rates into one lower interest rate loan. This can help assist in managing repayments, as well as savings on interest costs and fees.

Find out more about Debt Consolidation with Wisr.

With the the Round Up feature on Wisr App, you can pay extra off your debt with daily purchases.

Great, so how does it work? When you buy something the Round Up feature will round it up to the nearest dollar, and the difference goes towards your debt, Wisr loan or savings account. It's a simple and effective way to get in control of your finances and keep better track of your debt.