How your credit history is linked to your financial opportunity

While the world looks much different today against the backdrop of COVID-19, with the adoption of positive credit reporting, Australians need to realise: Going forth, a good credit history is a gatekeeper to financial opportunity.

From buying a home to purchasing a new family car and much more, the types of purchases that create meaningful economic impact are the same things many of us, including millennials, want in life.

Purchases like these will require sound credit history, which is why protecting your credit history in 2021 and beyond is essential.

Here are three ways you can protect your credit history for a financially healthy year:

Check how your home loan compares

1. Don’t be afraid of your credit report

A common myth is that checking your credit report will hurt your credit score. It’s simply not true. Your credit report serves as your financial references. Being familiar with the information in it enables you to protect your financial health.

If you’re planning to apply for a mortgage in 2021 that will require credit checks, start by looking at your credit report.

In Australia, you can request a free credit report once a year, the report serves as your financial reference sheet for lenders.

Use this free service to review it annually or just before you apply for a mortgage to make sure there’s no suspicious activity on any of your accounts.

Give yourself time to ensure your accounts are in good standing and that your credit history is ready to work for you when you need it.

2. Pay on time, every time

Nothing will damage your credit history faster than missed payments.

To maintain a positive credit history in 2021, pay on time to the best of your ability and make a plan to catch up on any missed payments. Enrolling in autopay can be a helpful way to stay on a payment schedule that works for you.

If you might miss a payment, contact your lenders or service provider as soon as possible. Many lenders have special financial hardship assistance in place to protect your financial health during your period of hardship.

3. Protect your financial health from fraudsters

With people spending more time at home and online, the COVID-19 pandemic has contributed to an increase in fraudulent activity and this is likely to continue for the foreseeable future. To help combat this, use a credit card to make your online purchases.

Doing so can help protect you against losses tied to fraudulent charges as credit card providers tend to have loss protection as one of their product features.

Another benefit to checking your credit report regularly is that it can help you spot potentially fraudulent activity on your credit accounts. If you’re not already, using a credit-monitoring service can alert you to suspicious or fraudulent activity in real time to protect your credit standing and your financial health in 2021.

Tell us: Enjoyed this article? Don’t forget to like and share.

And while you’re here, take our mortgage shredder challenge and discover how much you can save on your home and investment loans by using loansHub technology as your personal mortgage manager. To get a discover why loansHub and what we do, click here.

This article via Millennial Money does not constitute advice; readers should seek independent and personalised counsel from a trusted adviser that specialises in property, a tax accountant and property design specialist.