Clean up your credit rating to secure your dream home

By Pia Vogel
Have you been thinking about taking that leap of faith onto the property ladder? Well, you wouldn’t be alone. With interest rates at an all-time low and properties across the country selling like hot cakes, it’s no wonder everyone wants to jump on-board! 

But before you get excited and start looking at properties and researching your dream neighbourhoods, there is one key thing you need to do first. Check your credit rating!

Approximately 1 in 10 Australians have a negative listing, preventing them from securing a loan. Checking your credit score in advance gives you the knowledge and therefore the opportunity to improve your score should you need too.  

So to give you a rundown, here are hopefully all the answers to your questions about obtaining your credit report. And if you do have a low credit rating and you want to talk to a professional, don’t forget here at HomeSource we offer a specialised lawyer service and access to an accredited financial planner service, which is very affordable. 

What is a credit report?
A credit report is a basic history of your past financial activity. A credit report generally contains information such as; date of birth, gender, drivers licence, addresses, employment history, current employment, credit applications and negative listings such as overdue accounts and bankruptcies.      

If I have a low credit score how can I improve it?

The biggest no-brainer to improve your credit score is to ensure you are making all your repayments on time. Here are some quick tips to help you improve you credit score if it’s sitting a bit low. 

Check your report in detail
When you receive your report, go through the information with a fine toothcomb! If you see a listing you believe is incorrect, you should contact the company in question and ask for it to be rectified immediately. 

Get organised
Check that you have all your payments in order. List the dates that the payments are due and make a note a couple of days prior to ensure you pay them on time. It may be worth setting up direct debits so you don’t have to worry about missing any payment dates. Just make sure you have the money in your account otherwise you could be charged by your bank! This will also be noted on your credit report, therefore lowering your score.  

Use your credit
Use your credit as much as you can. You don’t have to spend more, just put all your spending on your credit card and pay it off every month. The good use of credit will then outweigh the bad. 

Don’t take out any new credit
Each time you apply for credit it’s added to your report, which usually drops your credit score slightly. 

Piggyback on someone else’s credit
This is a great way to quickly improve your credit score. But it requires a very trusting relationship. Your trusting person adds you to their credit account, by adding you as another card user. Their payment history will then be reported on your credit report too.  

Reduce your overall debt
Reducing your overall debt listed on your credit report is a very effective way to quickly boost your credit score. 

Now you are armed with all facts to improve your credit history, you should soon be well on your way to purchasing that dream house! Just make sure you always seek professional advice first before you make any big decisions. And don’t forget, here at HomeSource we can help you! 

Happy house hunting!