4 healthy financial habits to keep your credit score in good shape

Creating healthy financial habits can help you tighten the belt, boost your savings and live within your means. But did you know they can also affect your borrowing power?

How? Because healthy financial habits lead to a healthy credit score and our credit score has an important role to play in how much money we’re able to borrow.

But what is a credit score and why does it matter?

Every adult Aussie has a credit score - it’s a rating that lets lenders know whether you’re likely to be a good borrower - a bit like an Uber rating for your finances. In fact, your credit score can even make or break your chances of getting a personal loan or a credit card application approved or even changing mobile providers. 

Your credit score is affected by things like your current level of debt, your credit card and loan repayment history and whether you’ve defaulted on any loans in the past. 

Want to know what your credit score is and how you can check it? Find out more here. 

4 healthy financial habits for a good credit score

Keep your credit score in great shape with these healthy financial habits:

1. Make your loan and credit card payments on time

Missing your loan or credit card payments is one of the fastest ways to chip away at your credit score. Your credit score takes into account your repayment history for the past 24 months so, if you want to keep your credit score in tip top shape, be sure to keep up with those all-important repayments. 

2. Due date alerts and recurring payments 

Setting up SMS alerts and reminders for your payment due on your phone is a great way to keep on track with your repayments. Getting set up with recurring payments to automatically pay your regular credit card or loan payments for you, is another great life hack to make sure you never miss a payment again. Your credit score will love you for it! Find you how to set up recurring payments here.

3. Reduce credit limits and pay debt down 

Lenders will look at the total amount of credit that you have available, not just how much you’ve used so reducing your credit limit can go a long way towards improving your credit score. Make paying down debt sooner rather than later a priority by increasing your regular repayment amount for credit cards and loans above the minimum. You could save a bundle on interest too - winning!

4. Don’t max out your cards

Maxing out your credit cards or exceeding your credit limit on a regular basis is not a good look as far as financial responsibility goes so make sure you keep spending on credit in check. Credit cards can be super convenient but if you’re spending more money than you have, you can slip into a cycle of debt and your credit score will suffer.

How much could I borrow?

See how much you could borrow for your first home with our borrowing power calculator.

First home buyer? 

Get expert guidance from a Lending Specialist to help you weigh up your options, explore some great home loan options here or use our home loan comparison tool to find out which home loan could be the best value for you.