Getting your first credit card may seem like the most exciting part of stepping into adult life. But it’s not like in the movies where you’re skipping from store to store, arms full of designer brands swiping this magical plastic card with an ear-to-ear grin on your face. The reality is, part of having any finance-related product means having a whole lot of baggage attached to it, the baggage being your credit history. It will either work in your favour or not, so it’s important you keep a tight rein on all things money-related if you want your credit history to help you take out a loan in the future.

How to start off on the right track

The moment you start taking financial responsibility for yourself is when you start establishing credit history. So if you want to get off on the right track, start small with paying mobile plans and other general bills on time. Overdue bills are the quickest way to land yourself a bad credit score. Keeping your payments organised and timely are effective ways to boost your rating. When it comes to your job and living address, stability is the key to attracting a good credit rating. Proving that you have a steady income and have a stable living environment makes you more reliable and capable of borrowing money with a guarantee that you are able to pay loans back without concern. To further enhance your credit rating, having a central location for your incoming wages and showing how well you pay your fees without any overdue issues can create a great relationship with your bank. With your credit card, keeping on top of timely repayments and paying in full each month can push you up into the high end of credit scores. 

What causes bad credit scores?

A common issue that cause people bad credit scores is that they apply for any and every credit card that looks like a good deal. What they don’t realise is that the more credit cards that they apply for, the lower their credit score gets. Attaining multiple credit accounts can easily lead you into debt as repaying debts can become overwhelming quite quickly. Forgetting to pay any bill or fee can cause serious implications for your credit score and can stick with your credit history for a long time. So sticking to (preferably) one credit account can be beneficial as you only have to keep track of one repayment account. You’re also helping your future self by gaining a good-looking credit score that will help you to successfully take out a loan without any issues.

What to do when you have a bad credit score 

Don’t think you have no hope left if you’re stuck in the low credit scores. There are ways that you can get into the higher ranks; all it takes are a few changes with your financial decisions. If you are guilty of having too many credit accounts, you can consolidate these together and close any that aren’t needed. By organising your finances, you will be able to make any repayments on time and know exactly where your money is needed. If money is tight and you’re unable to fully pay off your accounts each month, try some new budgeting and saving strategies in order to keep a low balance on your credit card. The main thing that lenders look for in relation to bad credit scores are any bankruptcy records, overdue accounts or even any credit enquiries made in the past.  Maintaining a consistent money-management cycle will enable you to start crawling back up the credit rating scale.

Important information

Banking and Credit products issued by Police & Nurses Limited (BCU) ABN 69 087 651 876 AFSL/Australian Credit Licence 240701. Any advice does not take into account your objectives, financial situation or needs. Read the relevant Product Terms and Condition, before acquiring this product in considering and deciding whether it is right for you. The Target Market Determination (TMD) for products is available on request. Lending criteria, terms & conditions, fees & charges apply.