How To Be Credit Savvy – Jacaranda Finance Explains
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Credit criteria and terms and conditions apply. Representative example: based on a loan of $10,000 over 36 months a borrower with an excellent credit history can expect to pay a total of $12,389.76. WARNING: This comparison rate is valid 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 with the lender that finances your loan. Interest rates vary subject to a full credit assessment. This represents a comparison rate of 14.49% p.a. and includes all interest and fees included in your loan repayments over the life of your loan. For our personal loan product the APR starts from a minimum of 11.42% (14.49% comparison rate). The minimum loan term is 9 months and the maximum loan term is 24 months.
Credit criteria and terms and conditions apply. Representative example: based on a loan of $10,000 over 36 months a borrower with an excellent credit history can expect to pay a total of $12,389.76. WARNING: This comparison rate is valid 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 with the lender that finances your loan. Interest rates vary subject to a full credit assessment. This represents a comparison rate of 14.49% p.a. and includes all interest and fees included in your loan repayments over the life of your loan. For our personal loan product the APR starts from a minimum of 11.42% (14.49% comparison rate). The minimum loan term is 9 months and the maximum loan term is 24 months.
Want to be more credit savvy?
Being credit savvy is simply being smart with your money. There are heaps of ways to be smart with money and make good financial choices. The importance of saving money can’t be stressed enough. It is fundamental to be financially safe and to enjoy greater things in life. However, despite that money saving tips are the most basic and repeated financial advice out there, many aren’t following through on that tip.
Making good financial decisions, saving money and creating your own safety net is crucial to living a stress-free life. Jacaranda Finance has gathered some great advice on why and how you can be financially smart. Moreover, there’s several reasons for why you should be ‘credit savvy’, however, what’s behind YOUR financial goals are the most important.
Why should you be ‘credit savvy’?
Being smart with your money and making good financial choices will impact your credit score positively. Paying off your debt regularly on the agreed terms and not taking up more credit cards are examples that will help you improve your credit score over time. In addition, when you improve your credit score, you have a higher chance of being eligible for a larger loan amount, if you ever need a loan for necessities. Additionally, you’ll be debt free sooner and have more financial freedom.
Make smart decisions with your spending, your savings, and your investments. Being reasonable and realistic with your money choices can make you enjoy more financial security in your life. Save a reasonable sum of your payment, plan and set a budget for all your known expenses and loan repayments. If you have more left – set it aside for emergency and unpredictable expenses.
There are many long-term benefits from being credit savvy. By being financially wise, you’ll be able to:
- Improve your credit history and build a strong credit report;
- Reduce your debt;
- Save for your kids’ future;
- Have a security net for unexpected expenses;
- Have retirement savings;
- More money for hobbies, holidays, travel, or for your kids.
What is a good credit score?
To compare your credit score, use this easy table below. This is based on the credit scores provided by Equifax, an Australian credit reporting body.
| Excellent | 833 to 1200 |
| Very Good | 726 to 832 |
| Good | 622 to 725 |
| Average | 510 to 621 |
| Below Average | 0 to 509 |
How to be credit savvy
There are simple ways to be credit savvy that could help you pay off debt quicker, improve your credit score, and save money for more enjoyable things.
To begin with, it is important that you pay off your loan on the agreed repayment dates and don’t forget it! When you miss a payment on your loan, the lender could charge you with a default fee and in addition it could negatively affect your credit score. Therefore, make sure you always have enough funds in your bank account to afford the repayments. Remember – if you are determined to be money smart and credit savvy, you will have enough money to make the repayments. However, there are more easy measures you can implement to improve your financial situation.
Step 1: Know where your money goes
It is possible to gain control of your financial situation and you can start by writing down everything you think you spent money on in the last months. Then, locate your recent bank and credit card statements to see what you actually spent.
Step 2: Set a budget
Look at your spending habits and calculate all your expenses. Find out exactly how much you’re spending each month by looking at the bank statements. What’s your income? See if you are running short on cash or if you have some money left each month. For the money you have left – set savings and debt payoff goals. If you’re running short, cut unnecessary and costly expenses.
Step 3: Shop smarter
Shop for sales, buy second-hand products and sell off things you don’t use. Small actions can create big changes. Also, determine if you really need a product, and try to only buy necessities.
Step 4: Set financial goals
Determine what’s behind your financial decisions. Remember – motivation to stick to your goals comes after action. Set short-term financial goals and keep in mind why you started. It may not seem fun to not be able to spend money on whatever you want but it will certainly be worth it in the long run.
Financial goals
Financial goals are targets, usually driven by desirable financial needs and wants. Some examples of financial goals you might set yourself can include saving for a comfortable retirement, saving to send your children to university, managing your finances to enable big purchases, or simply get debt free. Regardless of why you want to be credit savvy and what your financial goals are – you’ll need to get organised. Write down your long-term goals and make short-term plans for how you’re going to reach the end goal. Set measures and after some time, evaluate how you are doing. Lastly, make small changes to your plan if needed.
We have listed a few financial goals to keep in mind to achieve financial success:
- Improve your credit score;
- Be eligible for larger loan amounts if you are in a situation that you need one;
- Have cash in-hand for unexpected events;
- Start investing to earn more money.
Be credit savvy – build a strong credit report
Having a good credit score puts you in a favourable position when it comes to borrowing money. A strong credit report has several benefits. You’ll for example have a better chance for credit card and loan approval and you can enjoy lower interest rates on credit cards and loans. That is because you might get more bargaining power over lenders or credit institutions. Additionally, it is easier to get approval for rental houses and apartments and you might be able to get better car insurance rates.
Stop living from paycheck to paycheck due to lack of control of your finances. Make your finances run on autopilot. Your money should automatically go to savings accounts, investment accounts, and to your creditors and/or lenders. This way you can effortlessly gain financial security and have more left to enjoy greater things.
To check your credit score and get information on how to build it up, visit the Tippla website.
Want to learn more?
Read our blog on how to easily cut costs.
Do you have several credit card accounts or are you paying off more than one loan? Apply for a consolidation loan with Jacaranda Finance!
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Last updated: 03/05/2022
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