A good credit history might not seem like something that is a priority for many people, but when it comes to getting approval for a loan, having a good credit history can make a very big difference to whether your application is accepted by lenders and the best interest rate that you are eligible for.
But how do you maintain a good credit history?
Pay your bills and pay them on time
When it comes to a good credit history, the first thing to do is to make sure that when you get bills coming in that you are paying them, and paying them on time. When you don’t pay bills, then you risk damaging your credit history. For example, if you haven’t paid a telephone or electricity bill by the due date, providers will send you reminder notices, try to organise payment plans, but can also default your credit rating. The easiest way to avoid missing payments is to set up an automatic payment from your bank account, then you don’t need to worry about forgetting to make them.
Keep your contact details up-to-date
Make sure that you keep your contact details up-to-date. If you change your telephone number or move house, then you should make sure that you notify all the credit providers that you have as soon as possible. If you forget to update your address or other contact details and credit providers have trouble contacting you it can have a negative effect on your credit history.
Keep an eye on your credit file
You should make sure that you are checking your credit file at least once a year to ensure that all your information is correct, that nothing is missing and that nothing needs updating. This means that not only can you keep an eye on how healthy your credit history is, but you can also see whether someone else is using your identity to obtain credit.
You can get a copy of your credit file from mycreditfile.co.nz.
Make sure you do your homework
Whenever you submit an application for credit to any provider they will check your credit file and they leave a note that says a credit enquiry has been made. This shows up on your credit history, so every time that you make an application another enquiry is added. This may not seem like much, but when you have a busy recent credit enquiry history, it can adversely affect your chances of getting credit – even if you have a good history of making payments to credit providers.
Make sure that you have done your homework before you start making any applications for credit so that you can prevent your credit history from becoming busy and a liability in obtaining credit.
Let credit providers know if you’re having problems
When it comes to paying your bills, there are times when everyone struggles, and when you are struggling the last thing on your mind can be telling your credit providers what is going on – especially if you don’t know when you are going to be able to pay.
However, getting in contact with them and explaining what is going on is essential if you want to maintain a good credit history. If you tell them exactly what is happening then there are things they can do to help. These measures can mean that you don’t end up with negative marks on your credit and that loans that are secured against property such as a house or car don’t end up defaulting. If you don’t keep your credit providers informed, they will assume that you intend not to pay and report the non-payment of bills and debts.
Correct errors on your credit file
If there is anything on your credit file that you don’t think should be there, an application for credit you don’t recognise, a line of credit open that you don’t have, a wrong address, a wrong employer, anything like that should be queried.
There are formal procedures in place with all credit providers and credit bureaus to ensure that anything that is incorrect can be smoothly and professionally dealt with, though you may be asked to provide evidence that something is incorrect.
If you’re looking to get a car loan but you’re worried about putting too many enquiries on your credit file or bad credit, Kiwi Car Loans can help. We can save you time and money on finance because we have access to a panel of lenders who we can compare on your behalf to ensure that you are getting the best finance option for your circumstances.