Taking care of your credit is a critical part of maintaining your financial wellness. Recent research by Credit Smart* found that 76% of Australians use some form of credit, with the most common being credit cards (56%), home loans (23%),
personal/vehicle loans (10%), and Buy Now Pay Later (14%).
The research also found that a significant number of Australians who were stood down from their job because of the pandemic found themselves unable to meet credit repayments; for many, it was their first time experiencing real financial stress.
We all know by now just how “unprecedented” 2020 was (hands up who’s sick of hearing that word?), but the financial impact of COVID-19 was found to be disproportionately felt by consumers with pre-existing poor credit behaviours and attitudes. So, it’s a good time to check in on how your credit health is measuring up and what you can do to keep it in the best possible shape.
Take ownership of your credit
There’s nothing to fear and no need to put off taking control of your credit score. It’s easy and gives you the peace of mind that you’re the one in the driver’s seat when it comes to your financial health. Your credit score works as powerful indicator towards financial wellbeing and should be checked regularly. If eligible you could also get a free copy of your credit report from Equifax to better understand your credit history and get on top of your credit.
Understand your credit score
A big part of taking control of your score is understanding what affects it. We’re introducing even more ways for you to easily understand your credit score and the key factors driving it; that is, the positive and negative credit behaviours that can influence your score.
Find out what lenders know about you
Knowledge is power. It really pays to understand What Lenders Know About Your Credit History because it is the key thing that affects whether or not you will get the credit you need and on what terms.
Have a plan
Don’t just treat credit as a well of money or you could find yourself with spiralling debt. Only take on credit after you have done a budget that shows you can repay a new loan and still meet your other loan repayments and required living costs. Prioritise credit use for things you really need and can afford.
Be willing to ask for help
If you do run into trouble and need help Getting on Top of Your Debt, speak to your existing lenders or a financial counsellor as soon as possible to find out what assistance they can offer. You can find free financial counselling via the National Debt Helpline and related support services.
At the start of this year, we looked at 5 Ways to Start 2021 off on a Strong Financial Footing. How are you tracking and what else can you do to improve and stay on track throughout the year?
Remember to stay on top of your Credit and regularly check your credit score through us.
*Source: Credit Smart/YouGovGalaxy Research (July 2020) / Released (Sept 2020). Sample comprised of a nationally representative sample of 1,069 Australians aged 18 years and older.
Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstance before acting on it, and where appropriate, seek professional advice from a finance professional such as an adviser.