How can I improve my credit score?
Equifax has some simple steps to help you keep your credit report healthy and improve your credit score:
- Pay your loans and bills on time
Consider setting up direct debits and schedule loan repayments for your pay day.
- Keep track of your credit commitments
Do your homework before applying for credit and keep track of your credit commitments. Making a number of applications within a short space of time will be recorded on your file and is not always looked upon positively by lenders, as it may be an indicator that you're in credit stress.
- If you move house or update your contact details, notify lenders
Advise lenders, phone and utility providers of your new email or physical address so they can re-direct bills to your new address. If you don't pay these bills, a credit infringement or overdue debt could be listed on your credit report.
- If you are having trouble meeting repayments
Talk to your credit provider who may assist.
- Keep track of your credit record
Proactively manage your personal credit report by regularly checking your credit report. You can obtain a free credit report each year. You could also consider signing up to a monthly subscription to get your Equifax Score and monitor changes on your Equifax credit report through credit alerts.
Learn more: Credit Smart also has some tips on how to improve your credit score.
What impacts my Equifax Score?
Your Equifax Score is impacted by the information contained on your Equifax credit report. There are a number of different factors which could impact your Equifax Score.
The type of credit providers you’ve applied for credit with. There may be different levels of risk associated with approaching a bank, buy now pay later store finance provider, hire-purchase or a phone or utility company for credit.
The type of credit you’ve applied for. For example mortgages, credit cards, personal loans and store finance may carry different levels of risk.
The credit limit or size of the loan you’ve requested in your application. A smaller loan or credit card limit may carry a different level of risk to a larger loan.
The number of credit applications you have made. Each time you apply for credit and a credit provider obtains a copy of your report, an enquiry is added to your credit report. Applications for credit can include loans, credit cards and applications for phone and utilities contracts. Even buy now pay later retail finance can result in a credit enquiry.
The ‘shopping pattern’ of credit applications over time. The spread of activity over the credit report’s life to date can have an impact on your Equifax Score. Shopping around for credit and applying to a number of different credit providers within a short space of time may negatively impact your Equifax Score. This flags you as a greater risk than if you had infrequent credit applications with only a few credit providers. As well, a relatively new credit file with many enquiries may represent a different level of risk than an older file with only a few credit enquiries.
Directorship and proprietorship information. If you are a company director or a proprietor and this information is listed on your credit report it may impact your Equifax Score. If you are it’s important to check the individual and commercial sections of your credit report.
The age of your credit file. The date your credit report was created may impact your Equifax Score. E.g. a relatively new credit file may indicate a different level of risk than one that has been established for many years.
Personal details. Your Equifax Score takes into consideration personal details such as age, as well as, stability factors like length of employment and time at your current residential address to help assess credit risk.
Default information. Default information on your personal or business credit report such as overdue debts, serious credit infringements or clearouts may negatively impact your Equifax Score, while a lack of default information in your file may positively affect your score.
Court writs and default judgements. A court writ or default judgement on a credit report is an indicator of increased risk and may negatively impact your Equifax Score. On the other hand if you don’t have this information it would indicate a reduced level of risk.
Commercial address information. Information such as location and the length of time you have resided at your current business address is a measure of stability and may impact your Equifax Score.
Learn more: Check out our infographic to learn what information goes into your credit profile and what it can be used for.
Does ordering my credit file impact my Equifax credit score?
No. Getting your Equifax credit report will not negatively impact your Equifax Score. In fact, it may help you improve your Equifax Score by helping you identify any errors or if your identity has been compromised.
By ordering a copy of your Equifax credit report it may alert you to information on your credit report that could be impacting your Equifax Score. For example, if there is something on your credit report that is inaccurate or credit enquiries that lead you to believe your identity may have been compromised.
If there is something incorrect on your Equifax credit report, find out how to fix it here.
If, after reviewing your Equifax credit report, you think your identity has been compromised, you should contact the relevant credit provider for more information and, if necessary, seek an investigation. You can also place a ban on your credit report. Find out more here.