Four simple steps to improve your Credit History

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What is a Credit History?

A credit history is a record of your responsible repayment of debts. A credit report is a record of your credit history from a number of sources, including banks, credit card companies, collection agencies, and governments. It does not take much to damage your credit history. A missed payment here, a late payment there and before you know it you have a default on your credit file.

 

Where can I check my Credit File for free?

For information on how to check your Credit Score for free, read through our other article:

Want to know your Credit Score? Check it for free Online

 

How do I fix my Credit History?

How long does a credit default stay on my credit file you ask? 5 years, even when paid! Once you have a mark on your credit file, you will find that loans are much more difficult to acquire.

 

It can be a difficult road, but rebuilding your credit file is defiantly worth the effort. Improving your credit file is a bit like losing weight — it takes time and there is no quick fix. The hardest part is just getting started. Fortunately, there are a number of tips to help you on your way.

 

Step 1: Pay your bills on time

Paying your bills on time is the most important contributor to a good credit score. Even if the debt you owe is a small amount, it is crucial that you make payments on time. In addition, you should:

  • Minimize outstanding debt
  • Avoid overextending yourself
  • Refrain from applying for credit needlessly

Applications for credit show up as inquiries on your credit report, indicating to lenders that you may be taking on new debt. It may be to your advantage to use the credit you already have to prove your ongoing ability to manage credit responsibly. 

 

Step 2: Keep balances low on credit cards and other “revolving credit”

From 12 March 2014 repayment history information, such as if you make your credit card and loan repayments on time, can be held on your credit report.  Whilst one late repayment, depending upon how late it was, followed by making your repayments on time, may not significantly impact your credit worthiness, a number of late payments could be an indication you are in financial stress and may negatively impact your credit report.

 

Step 3: Do your homework before you apply for credit, and only apply for credit when you need it

Every time you apply for credit and a credit provider obtains a copy of your report, an enquiry is added to your credit report. This includes short-term loans, payday cash loans, personal loans, mortgage or utilities applications you may make. Credit providers may take a negative view of a relatively high number of enquiries made in a short space of time, which may in turn affect your ability to obtain credit.

 

Step 4: Reduce the amount of debt you owe

Pay off debt rather than moving it around with different lenders. The most effective way to improve your credit score and credit file is by paying down your revolving credit.

 

The bottom line?

It takes time to improve Credit Scores. If you have negative information on your credit report, such as late payments, defaults, a public record item (e.g., bankruptcy) or too many inquiries, you may want to pay your bills and wait. Time is your ally in improving your credit scores. There is no quick fix for bad credit scores or a bad credit file.

 

 

 

How customers rate Jacaranda

Four simple steps to improve your Credit History Overall rating: 4.8 out of 5 based on 60 reviews.

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Small Personal Loan

Loan Amount

Minimum
$300


Maximum
$2,000

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Terms

Minimum
12 Months


Maximum
12 Months

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Costs

Up to 20% Establishment Fee
+ monthly fee up to 4%

Jacaranda Finance does not charge an annual interest rate on SACC loans. These small amount loans incur 'fees' instead of interest. The maximum comparison rate on our loans between $300 and $2000 is 199.43%.

WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate
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Examples

Loan Amount of $1,000 over 6 months repayable weekly (25 weekly repayments). $1,000 (Principal Amount) + $200 (20% Establishment Fee) + $240 (fees based on 4% per month over 25 weeks) = $1,440 total repayable in 25 weekly installments of $57.60.

Loan Amount of $1,000 over 12 months repayable weekly (50 weekly repayments). $1,000 (Principal Amount) + $200 (20% Establishment Fee) + $480 (fees based on 4% per month over 50 weeks) = $1,680 total repayable in 50 weekly installments of $33.60.

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Medium Personal Loan

Loan Amount

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$2,100


Maximum
$4,600

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Terms

Minimum
13 Months


Maximum
24 Months

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Costs

Annual Percentage Rate (APR) starts at 20.56%
Comparison Rate is 20.56% per annum.

This comparison rate is based on a medium amount credit contract of $2,500 repaid over 2 years with a $400 establishment fee and APR of 20.56%.

WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate
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Examples

Loan Amount of $3,000 over 18 months repayable weekly (78 weekly repayments). $3,000 (Principle Amount) + $400 (Establishment Fee) + $555.83 (reducing interest*) = $3955.83 total repayable over 18 months with weekly installments of $50.71.

Loan Amount of $4,500 over 24 months repayable weekly (104 weekly repayments). $4,500 (Principle Amount) + $400 (Establishment Fee) + $1081.85 (reducing interest*) = $5981.85 total repayable over 24 months with weekly installments of $57.51

* Reducing interest means that the 20.56% APR is applied to the outstanding balance on a loan. When a loan repayment is made, the loans outstanding balance goes down and the APR is applied to that lower balance. Therefore, the interest component of the loan will constantly reduce (as long as repayments are being made!) - thus it is called reducing interest.
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Large Personal Loan

Loan Amount

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$5,000


Maximum
$10,000

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Terms

Minimum
13 Months


Maximum
36 Months

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Costs

Annual Percentage Rate (APR) is 12%
Comparison rate is 19.88% per annum.

WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate
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Examples

Loan Amount of $5,000 over 18 months repayable weekly (78 weekly repayments). $5,000 (Principle Amount) + $1831.16 (Interest) = $6831.16 total repayable over 18 months with weekly installments of $87.57.

Loan Amount of $10,000 over 24 months repayable weekly (104 weekly repayments). $10,000 (Principle Amount) + $5041.72 (Interest) = $15041.72 total repayable over 24 months with weekly installments of $144.63.

* Reducing interest means that the 19.88% APR is applied to the outstanding balance on a loan. When a loan repayment is made, the loans outstanding balance goes down and the APR is applied to that lower balance. Therefore, the interest component of the loan will constantly reduce (as long as repayments are being made!) - thus it is called reducing interest.
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