When it comes to borrowing power, your credit score is like the key to the castle! The higher it is, the better the loan options and rates lenders will offer you. So, what goes into this magical number? It’s not just about paying bills – it’s about showing lenders you’ve got your finances in tip-top shape!
Here’s a peek at how different types of credit can impact your score:
Buy Now, Pay Later (BNPL): We all love a quick fix, but if BNPL balances stack up, it can create a big dent in your score. Each BNPL plan is viewed as a financial obligation, which could make lenders cautious.
Credit Cards: Got a few of these in the wallet? Carrying high balances or missing payments can hurt your score fast. Keep an eye on usage – lenders prefer credit cards to be paid down rather than maxed out!
Car Loans and Personal Loans: These add to your financial commitments, so consider the cumulative impact. A high debt-to-income ratio can make lenders wary.
Your Best Friend: Regular Credit Report Checks! It’s like checking your car oil – quick and important. Mistakes on your credit report can sneak up and knock points off your score. Take a moment every few months to review for accuracy, and you might just find a little extra borrowing power along the way!
Tip: Good credit management doesn’t mean no credit; it’s about *smart* credit. Keep balances low, pay on time, and prioritise essential debts.
Want to talk home loans and see how your credit score stacks up? Get in touch! We’re here to help you unlock your full borrowing potential.