2 May 2008
Credit rating decreases can suddenly see you unable to get finance when you most need it, but there are many things you can avoid to help preserve it. With a little diligence and foresight, you may be able to save your credit rating from total disaster.
Pay your bills on time
It may seem silly to mention such a simple thing, but it merits it due to how it can devastate your credit rating. Remember that lending requires a certain rate of repayment to remain profitable for the lender. Essentially, repayments on credit have to reduce the principal and the interest accrued. As long as you are repaying at a rate higher than the cash rate affects your principal, you remain profitable, but any sign that you might become unprofitable, like missing a payment, is a very bad thing. Make sure you pay everything on time, and don't delay the minimum payment of many small bills to focus on paying more off a larger bill.
Restrict your applications for credit
Your credit rating will suffer every time a credit check is done on you, so restrict the number of applications you make as multiple rejections will have a negative effect on your credit rating. You will also probably avoid more debt this way, as minimising your use of credit should help you focus on the debts you already have.
Please visit our credit cards and loans pages for a selection of products available to those with a decent credit rating.
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