What Are Some Ways to Establish a Credit History While Young?

When you’re young, it can be tough to establish a credit history. You may not have had the chance to open any credit cards or take out any loans. But there are still ways to build your credit history and improve your credit score. Here are some tips for establishing a credit history while you’re young and how Clear Credit Solutions can help fix bad credit history.

A good credit score, like a journey of a thousand miles begins with a single step, may be established when you’re young. Later in life, your track record of managing money can have long-term repercussions, making it critical for young Australians to start establishing good credit habits as soon as possible.

Your credit history is a record of your financial behavior, particularly as it relates to borrowing and repaying money. Your credit file is compiled by the three major credit reporting agencies (Equifax, Illion, and Experian), which utilize this data to calculate your credit score..

A credit score or credit rating is a measure of your financial management skills. Australians with a track record of on-time payments are more likely to have excellent credit scores, while those who frequently miss deadlines or have bankruptcies in their credit history are more likely to have poor ones.

When you apply for credit products like personal loans or credit cards, banks, lenders, and other credit sources do credit checks. Your credit score is used to determine whether you will make your installments on time or if there is a higher risk that you will default.

Credit scores are used by a wide range of businesses, including banks and finance companies, as well as telecommunications firms and energy providers. When you apply to be a client, they use your credit score to see whether or not you’re likely to pay your bills on time.

Customers with good or excellent credit are more likely to get their credit applications approved promptly, and they may qualify for reduced interest rates or fees, as well as larger borrowing amounts.

Borrowers with low credit scores may face more difficulties borrowing money, such as longer processing times and the need to meet stricter eligibility criteria, or pay higher interest rates and fees. Borrowers with bad credit might find that their applications are rejected entirely, unless they can offer additional security to lessen the lender’s financial risk.

In Australia, you don’t generally have a credit history. You do not apply for a credit score the same way you would for a tax file number.

Instead, your credit history begins the first time a credit event is recorded and reported to a credit bureau. Because most credit offers have age restrictions, this is typically after you turn 18.

A credit event does not have to be applying for a credit card or taking out a personal loan. It might be as easy as signing up for a post-paid phone plan, or putting your house’s phone, internet, and electricity in your name. When the provider performs a credit check as part of your application, this will be the first time your credit history will start.

having no credit score isn’t the same as having terrible credit, but it may make you seem shady to lenders. This might occasionally prevent you from being able to take advantage of some of the greatest offers from credit businesses (as well as phone, internet, and energy providers), until you’ve improved your credit score.

The length of your credit history has an impact on your credit score, so the sooner you can establish it, the better.

How do you improve your credit history? Apply for easy-to-manage credit solutions. Some banks and lenders provide specialised services as your first credit card or personal loan. These can be a bit more expensive than other forms of plastic, but they may not include all of the bells and whistles.

By limiting your credit applications is an excellent idea, as it is making numerous applications for credit in a short amount of time may lead lenders to believe that you’re struggling to manage your money and desire more credit. If this happens, your loan application could be denied, which can harm your credit rating.

Also make sure you keep up with your bills and repayments. As a late payment on a bill or credit repayment should not be recorded in your credit history, but a significantly overdue invoice (for example, more than 14 days late) will be recorded as a Late Payment in your credit file, potentially affecting your credit record. You risk a Default appearing in your credit file if you fall behind in your payments (for example, if you miss two consecutive payments of $150 or more), which can have a significant impact on your credit score.

Keeping credit cards open might help, even if you don’t use your credit card very often, the longer you can keep it open without any negative items on it, the better. Just be careful of any costs you’ll have to pay, as well as the temptation to spend all of your money on your credit card. Make sure to maintain some consistency, because your job and home address are also recorded in your credit file, changing careers or relocating might indicate to lenders that you’re unreliable.

Clear Credit Solutions is the credit repair company you can trust. We have years of experience and expertise in repairing credit scores and improving your chances of being approved for a loan. We even have a money back guarantee! Contact us today to get started with our clear credit process!

Clear Credit Solutions is dedicated to helping you obtain the finance you need. We have a team of credit repair experts who can help to improve your credit score and give you the best chance of being approved for a loan. Contact us today on 1300 789 783 to fix bad credit!

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