Lenders are willing to extend credit to consumers with a “Good/Excellent” credit score. A “Good/Excellent” credit score clearly indicates that a consumer is financially disciplined and will repay borrowed money. The good news is, it’s way better than having poor credit. Whilst lenders may still consider credit for consumers with a “Fair” credit score, by boosting a “Fair” credit score to “Good/Excellent”, you can unlock better home loan offerings from banks, negotiate lower interest rates and be assured of more home loan options to choose from.
How to improve your credit score:
1. Don’t miss any credit payments – Your payment history is one of the most important aspects in determining your credit score. A history of on-time payments can help you to achieve an excellent credit score.
2. Keep credit account balances low – Use your credit card and revolving credit facilities responsibly by aiming to keep the balances low, as high credit utilization can negatively affect your credit score.
3. Limit the opening of too many new credit accounts – Opening numerous credit accounts in a short period can impact your credit score negatively as it is associated with “hard” inquiries and can indicate that there has been a significant change in your financial circumstances and that you rely too much on credit. Therefore, manage and monitor your credit applications to maintain a stable financial profile. Even when approved offers are not accepted, your credit profile will show that you have applied for credit – “hard” inquiries will leave a footprint on your credit profile.
4. Catch up on overdue accounts – Bring overdue accounts up to date as it can improve your score by stopping further late payments from being added to your credit history.
5. Maintain a healthy mix of credit – Maintain a healthy mix of credit, e.g., retail store accounts, credit cards, home loan and service contracts such as cell phone accounts, to establish a strong credit history.