1. Have an active credit account.
Lenders do not look favourably on borrowers with no credit history, with no history lenders have no way of knowing you are a responsible borrower. Unfortunately, this can result in a loan being declined as you have no proven track record.
Start by opening a mobile phone plan or store card in your name and make sure you pay on time.
2. Pay your bills on time.
Did you know that an overdue account above $150 makes will appear on your credit report after 60 days and stays on it for five years! It’s easy to keep track of bills by setting up calendar reminders or direct debits to ensure you are never late.
3. Avoid default listings at all costs.
Any default listed on your credit file will remain there for five years, even if you pay the outstanding account, even worse are judgments as they last for seven years.
Defaults are difficult, if not impossible to remove from your credit file, so avoid them at all cost. If you are struggling to make a repayment, consider speaking to your lender about a hardship extension, most are happy to negotiate. Putting your head in the sand is not an option as the problem will not go away.
4. Avoid too many credit enquiries.
Every time you apply for any form of credit, your prospective credit provider is likely to make an enquiry on your credit report. Each enquiry takes a few points off your credit rating, and lenders tend to view them negatively because having too many hard enquiries on your report suggests that you could be declined previously with other lenders. Be very aware of how many online enquiries you make and if they ask your permission for a credit check.