Credit Rating Explained
Your credit rating is as important to your ability to borrow loans from banks, build equity, invest and do much more, as is your health to being accepted into a sporting team. While having a bad credit rating isn’t the end of your financial dreams, the fact is that if you get a bad rating from one lender and it goes on your credit file, that doesn’t give much confident to future lenders to put their trust in your ability to make prompt repayments.
There are several steps you can pursue to avoid going down that path where you end up with a bad credit rating. The most important of these is to cut unnecessary spending. You’d surprised how many Australians go shopping for the sake of going shopping and this doesn’t just apply to women. Men can be just as bad. Profligacy knows no bounds, and certainly not gender related ones!
People often purchase clothes they only wear once and dump away in the cupboard, books they only read the first few pages of and dump away on the bookshelf, or join a gym only to do 30 minutes on the treadmill the first few nights then spiral off due to laziness and demotivation, or walk into a restaurant and order a three course meal and struggle to get through the second. Sound like a familiar story? Well you’re not alone!
Unworn clothes, unread books, under-utilised gym membership and hard to finish meals at expensive restaurants – not only do they all cost money, they cost money for goods and services you don’t really require to the extent you feel you do at first. Shopping on impulse is the greatest enemy of serious money savers.
Research has shown that many of the people who end up with a bad credit rating often go back to re-evaluate their financial circumstances and end up finding there were so many things they spent on, which they didn’t really need to spend on all these years. When one works out a grand total of the sum spent on such extravagances, it turns out the amount exceeds what you owed on your credit cards and other loans that got you the bad credit rating in the first place. That is precisely when people start to wish they had spent more watchfully in the first place.
Once you feel you’ve managed to get a grip on your spending, the next thing to do is to automate any regular payments from a credit card source that is not overdrawn or a debit account that you always have some amount of funds in. By doing this, you will be making sure that when your mobile phone bill, internet bill, gas or electricity bills, pay tv bill or any other on-going expenditure kicks in on a monthly basis you will have adequate funds in your account.
Remember, it’s usually the simplest things that win the day. You’d be surprised how much you will not only end up saving as a result of doing the small things suggested in this post, but actually avoid getting a bad credit rating for the future!
If you’re unsure of your credit rating – you can always check out Veda Advantage – your credit report is free if they mail it out to you, however you can pay to get within the same day also.
Call 1300 307 155 and start saving today!
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