Helpful Resources
  • Close

Request a Consultation

Get Ready Early - Fringe Benefits Tax (FBT) 2022

It’s that time of year again: time to think about your Fringe Benefits Tax (FBT) return. Employers must lodge an FBT return if they’ve provided fringe benefits to any employees or associates during the FBT year. With the FBT year ending 31 March 2022, you’ll n.....

Wealth - 6 min read

How important is your credit score? Believe it or not, your credit score can affect all of these areas of your life:

  • Your ability to borrow money for a home or car purchase
  • Whether or not a property manager approves you for a lease
  • What kinds of rates you can access for insurance
  • Your employability in some fields

A respectable credit score is worth attaining. But what can you do if you need to improve your credit score quickly? We’ve got six tips for you.


1 - Check your credit score annually

Monitoring your credit score can help you to detect potential problems. Occasionally, credit reporting agencies make mistakes, and if you spot them early on, you can fix them before potential creditors notice the issues.

Sadly, we all need to watch for identity theft as well. Scan through your accounts and check balances. Your credit report acts as a “paper trail” for accounts opened in your name. If you see a credit card account that was opened in your name, quickly maxed out and then abandoned, take action immediately. Formal dispute processes generally take several weeks, so begin right away for a quick improvement to your credit score.


2 - Stay Up On Your Payments

One of the simplest ways to improve your credit score is to pay your bills on time consistently. According to Experian credit reporting agency, payment history is the most prominent factor in determining your score.

If cash flow problems have interfered with timely payments, talk with your financial advisor about possible improvements. From a lender’s point of view, if you’ve routinely succeeded in paying your bills on time, you’re a safe bet for future loans as well.


3 - Balance Your Credit Utilisation Rate

A high score reflects judicious use of credit, and one of the measures reporting agencies use is a ratio of available credit to actual debt. If you use most or all of your available credit, you’ll have a high ratio, and this is a red flag.

To improve your credit score quickly, lower your borrowing ratio by paying off some of your debt. Australians use several different reporting agencies, and each agency has its own formula. But generally speaking, it’s advantageous to use less than 10 per cent of your available credit. Therefore, if you have a credit card with a $7,000 limit, keep your balance less than $700.


4 - Leave Repaid Debts on Your Reports

Remember that glorious feeling you had when you paid off your car? You might be tempted to wipe it off your credit report, but restrain yourself and leave the record there.

Why? As long as your payments were timely and complete, the presence of that old debt is a testament to your diligence and responsible nature. Bad debts that negatively impacted your score are eventually dropped from your credit report, and that’s a good thing. But leave the “paid in full” accounts right where they are.


5 - Only Apply For Credit You Need

The credit agency Equifax recommends only applying for credit when you need it. Making several credit applications within a short period can drop your score. So if you’re looking for ways to boost your numbers quickly, put a halt to applying for credit.

Instead, make wise use of the credit you already have. For instance, instead of signing up for a credit card at a store offering a promotion, use one of the credit cards you’ve had for a long time. And then pay off the balance as soon as possible.


6 - Time Your Applications Carefully

Two types of inquiries can be made into your credit: hard and soft. Soft inquiries, which include your personal credit checkups, don’t negatively impact your score. Hard inquiries, on the other hand, can negatively impact your score for 6 to 12 months.

Hence, you’ll want to minimise hard inquiries and time them carefully. These queries include applications for credit cards, mortgages, car loans and personal loans. If you plan on applying for a mortgage in a year, minimise your hard inquiries in the meantime. And when you shop around for mortgages, avoid giving multiple lenders access to your credit report. Instead, narrow down your options by comparing rates before you allow pings to your credit.

To learn more about improving your credit score, or to discuss borrowing details with our lending experts, reach out to us at Altus.


New Call-to-action

Could Your Business Benefit from an Outsourced CFO?

Set your business on the right path with this simple guide.

Could Your Business Benefit From an Outsources CFO_Resources

Prospective Business Owner - Succession Checklist

Make sure you’re on the right track with this online checklist.

Business Owner - Succession Checklist_Resources
Have a question for Julie Azzi?

Connect with the author of this post and they'll get back to you.

close (1)