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Building credit is simply part of life in Australia.

While achieving a good credit score may seem difficult from the outset, once you learn a few tricks for improving your credit you’ll realize how much control you actually have over your finances.

More importantly, it’s never too late to turn your credit rating around, even if you have a poor credit history.

Having a bad credit history does not have to be your destiny. Learn how to fix your credit score today

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Here are five ways anyone can start fixing their credit score in 2017:

1. Pay Your Bills on Time

If you miss a payment of more than $150, you receive a black mark on your credit report. And it doesn’t go away. Overdue payments remain on your report for five years.

One overdue payment won’t kill your credit. But regular missed payments add up over time and because they stay on your report for so long, they start to paint a negative picture.

Paying your bills on time sounds harder than it is if you budget for them carefully. Life can be crazy, so use tools like direct debits and calendar reminders to make sure you don’t inadvertently miss a due date.

If you struggle with keeping enough money in your account, you can also choose to pay bills early. In some cases, it’s also easier to throw money at a bill while you have it than wait for the due date to arrive to find out you can’t pay it.

2. Run Far and Fast from Defaults

Missing a payment once in a while isn’t great for your credit, but you’re not going to be blacklisted from a creditor because you missed your mobile phone payment once or twice.

However, what will knock you down are payment defaults.

When a payment goes into default, it’s nearly impossible to remove it from your credit file. In fact, they’re so difficult to deal with that it’s better to pay off a bill even if the bill is wrong then to let it go into default. If this is the case, it’s easier to negotiate your money back than to erase the black mark from your credit file.

There are other paths to explore in the event you simply can’t make a payment. Talk to your lender about a hardship extension sooner rather than later to negotiate a more lenient repayment option.

It’s easier to explain your situation up front than to force the bank to chase after you. Plus, it will keep you out of default, which is a huge bonus.

3. Don’t Make Regular Credit Applications

Paying bills is hard for everyone. But another way to help your credit score along is to play by the rules. Applying for credit on a regular basis, particularly when you won’t be approved, adds a small black mark to your credit profile. So, it’s best to avoid it.

When you apply for credit, the potential lender makes what’s called a “hard” inquiry on your credit report. If the lender sees you apply for credit every other month, they make assumptions about your attempts to take on new debt. This suggests that you don’t manage the money you currently have well.

Shopping around for credit suggests that you don’t manage the money you currently have well, and it also suggests you might not pay it back if they give it to you.

While it may be tempting to open a new credit card or take out a loan to keep emergency funds around, it’s best not to apply for it if you 1) don’t need it and 2) aren’t sure you’ll be approved.

If you’re guilty of this habit, don’t worry. The inquiries stay on your report for five years. However, creditors tend to care less about the time you were desperate for credit three years ago than they do if you applied for two new credit cards three months ago.

4. Build Your Credit Score with Bank Loyalty

Becoming pals with your current bank is a good way to build credit over the long run.

By doing things like paying your salary into your account, starting a savings account, and using direct debit and bill pay features, you’re providing your bank with a holistic sense of who you are and how you manage your money.

Your checking account won’t build your credit for you. In fact, your overdraft might hurt it. But giving a bank access to your regular financial dealings may impact their decision to give you credit should you want it.

This is a good chance for those with no or poor credit history to build their credit future responsibly and often with a better rate than elsewhere.

Effectively, your bank will know how well you have managed your money recently first-hand whereas other banks won’t have access to that information.

5. Get a Credit Card And Use It Responsibly

If you have few other debts then credit cards are a great way to build your credit score. And if you’ve never had one before, you’ll notice they’re hard to get. That’s why #4 is so important.

However, you need to use it responsibly. Setting up a budget is essential for credit cards to prevent you from inadvertently using your entire limit before you’ve realized it.

Also, it pays to be a credit deadbeat.

A deadbeat is someone who pays off their balance every month. You’re a deadbeat because the bank isn’t able to make money from interest.

Not only does paying your balance improve your credit score, it also saves you huge amounts in interest over the long run.

Get Started Today

Money matters are difficult for everyone, but improving your credit score one step at a time doesn’t require pushing a boulder up a hill. Simple, responsible practices demonstrating your trustworthiness with your (and the bank’s) money are enough to improve your score.

Remember, emergencies happen. If you have to miss a payment, your credit isn’t ruined. And if you’re in a tight spot and need extra cash but don’t have the credit, talk to us about a loan.