How to keep a good credit score

Applying for vehicle finance for your next car lease?

Maintain your healthy credit score, and improve your chances of being accepted for the best finance deals available. 

When it comes to loans, mortgages, or vehicle finance, a good credit score is a great place to start with these applications. A high credit score shows lenders you can manage your finances, pay back loans on time, and all in all, you're a low risk to the lender.

The perks of a high credit score are more competitive interest rates and higher credit limits.

How do you build a good credit score? I hear you asking. Well, it’s not just about paying off your credit card on time. You’ll also want to:

• Register on the electoral roll (it’s easy and earns you bonus points)
• Check your credit report for errors (mistakes happen!)
• Manage credit cards carefully—having multiple cards can help or hurt you, depending on how you handle them

We’ll get into the nitty-gritty of building credit later, but first, let’s talk about maintaining that shiny score once you’ve built it up.

Interested in using a credit reference agency? 

Teaming up with a credit reference agency (CRA) will take you through your credit report – they help you stay on top of things, spot any issues, and keep it looking great.

The result?

You’ll save money in the long run and avoid those awkward “credit denied” moments when you need it most.

There are plenty of agencies out there. Check out a variety of CRAs to see which one suits your financial needs best. They can help you:

• Understand, monitor, and check your credit score daily
• Report errors and get support with disputes
• Protect yourself from fraud while improving your chances of getting credit in the future

With credit reference agencies, there’s most likely going to be a monthly or one-off fee to pay for these services, but with all the stress that can be avoided around credit score and maintenance it’s definitely worth your coins.

How do you maintain a good credit score?

The lender or funder in a leasing situation, you want to wow them. 

Your financial management, wow; your credit score, wow; your ability to manage multiple lines of credit, again wow.

Those are the people you want to impress. To do so you need to maintain a good credit once you have built it up, and we will show you exactly how.

1. Pay all your bills on time

Your payment history is like your financial fitness tracker – lenders want to see you hitting your goals consistently. Miss a payment or pay late? That’s like skipping leg day - your credit score’s strength takes a hit, and nobody wants that.

Whether it’s your phone bill or your credit card, there’s one simple rule: pay it back on time, every time.

Paying your credit card bill in full will impress lenders. If that’s not possible, just make sure you hit the minimum payment by the due date.

Punctuality isn’t just polite, its ‘excellent’ (credit score).

A little forgetful? Aren’t we all, it’s no problem - set calendar reminders or automate payments through your bank to keep things running smoothly.

2. Keep your credit card balance low

Experts recommend that you keep your combined credit card balance below 25% of your credit limit. 

The higher and closer your credit balance is to your credit limit, the worse your credit score will be.

Because if you are close to your credit limit each month, living life on the edge, this could be a little nerve-wracking for lenders. To reassure the lenders, give the credit limit some breathing room. Like leaving room for dessert, you don’t have to finish the whole plate.

3. Watch out for errors on your credit report

Mistakes on your credit report could lead to a drop in your credit score.

For example, an incorrect address or a hard search for credit you don’t recognise will affect your score. Identity theft and credit card fraud can also lead to inaccurate information, be aware of this.

So, it’s important you act fast and report any credit mistakes you spot quickly. Building a good credit score isn’t a quick and easy job.

Don’t let a silly mistake on your report affect this.

4. Don't close your old credit cards

One of the benefits of having multiple credit cards is that you’ll show lenders you can successfully manage several credit accounts.

Multi-tasking is a very impressive skill, show it off.

5. Cancelling a credit card can impact your score

Why is this? Your overall credit utilisation will increase which won’t look good.

Keeping long-held credit accounts will look better to a lender as it shows you’re a reliable borrower.

Can you lease a car with bad credit?

The million-dollar question. 

Poor financial decisions in the past shouldn’t prevent opportunities forever.

You can still lease a car with a bad credit rating. When leasing a car, a strong credit rating can improve your chances of your finance application being accepted though.

If you have a lower credit score, the lease provider may see you as more of a risk. However, this doesn't mean it isn't possible.

There’s no magic ‘minimum credit score’ to lease a car, as a good to excellent credit score will show funders you are low risk and that they can rely on you to make your repayments on time.

The good to excellent credit score rating, though, can vary on from each credit reference agency, who each have their qualifying scores for each category.

That said, aiming for a good to excellent score will give you the best shot at approval and competitive finance terms.