The dos and don'ts of getting your credit score in shape

In a way, your credit score is a bit like your body. Look after it, nurture it, put the right stuff into it, and it will usually serve you pretty well. Treat it poorly and eventually that neglect will catch up with you.

Whatever your stage of life or financial position, it’s ideal to have a good credit rating– or be working towards a better one. After all, the better shape your credit score is in, the more likely you are to get access to the finance you want, at the rates you need.

Watch: How credit scores are calculated, by Your Money & Your Life with Get Credit Score

So, what are those things you need to do – or stop doing – to help your credit score tone up?

DO: Cancel credit cards you don’t need

Holding on to credit cards you aren’t using can negatively affect your credit score. Show you can handle credit responsibly by cancelling what you don’t need.

DON’T: Make unnecessary credit applications

Every credit application gets added to your record – the more applications you make, the worse it looks. So only apply for credit if you definitely need the capital.

DO: Pay your bills on time

If you’re 60 days or more late paying a bill, or 30 days on a handful of occasions, you’ll get a mark against your name. Paying bills on time shows that you’re responsible when it comes to repayments. Making regular minimum payments also demonstrates top-notch credit behaviour.

DON’T: Overuse or mismanage ‘buy now, pay later’ services

‘Buy now, pay later’ services can be very appealing, but that fleeting moment of satisfaction may leave a lasting mark on your credit history if they are not managed properly. Registering with these services can sometimes require a credit check – too many of these enquiries in a short period might affect your credit score. Make sure payments are made on time, as missing payments could have a negative impact on your score and cause you credit problems down the track.

DO: Keep your loans and credit accounts in good order

If your loans or credit cards are in arrears, your credit score will quickly head south. If you miss a repayment by 14 days or more, you’ll be reported as being in arrears – and that’s something lenders will understandably frown upon.

DON’T: Move without updating your contact details

There are so many things to remember when you’re moving house, but it’s super important to update your address with lenders and utility providers. It can be easy for a bill to be overlooked in a big move, but miss your final electricity bill, for example, and an overdue debt can be recorded.

DO: Apply for credit with reputable lenders

If you’re shopping at fast-food joints all of the time, you’d need to start questioning your eating habits. The same goes for your credit arrangements.

Lenders will look at who you’ve been applying for credit with. If it’s at the lower end of town – payday lenders, for example – they’ll make up their own minds about your financial viability.

DON’T: Forget to check your credit score

Your credit score is a number between 0 and 1200, and ‘good’ is usually 600 upwards. Visit GetCreditScore.com.au and view the credit score held by leading Australian credit score provider Equifax. Keeping a close eye on your score means you can get a better indication of how lenders view you. You can see the impact of your positive credit actions and stay tuned to any negatives.

By taking small positive steps and monitoring your credit score on a regular basis, you can tone up and build a financial muscle that’s worth flexing!

This article is brought to you in partnership with GetCreditScore.