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The Good, the Bad and Your Credit Score

Its all Insurance

Posted on Thursday, March 31, 2022

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You hear the word ‘credit’ and immediately want to run for the hills. But did you know there’s such a thing as ‘good credit’? Here’s what you need to know.


Credit often gets a bad rap, but it’s necessary to help you reach certain milestones. Whether you’d like to buy property, take out a loan or purchase a car, you need a good credit score. Here’s everything you need to know about good credit, including tips for building it.


What is a good credit score?


Good creditis when you have a positive credit rating or score. This means that you’ve been managing your credit well (e.g. by paying off your debt consistently and on time).


Contrastingly, bad credit is when you have a negative credit score.


This may happen if:


  • you don’t stick to the minimum repayments on any debt you owe
  • you miss or make late payments
  • you use too much available credit regularly
  • you have a high balance on one or more credit cards or loans


The importance of good credit

Having a good credit score means you have a history of being a reliable borrower. Some of the great benefits of this are:


  • lower interest rates when you borrow money
  • a better chance of credit approval (e.g. for a loan, store credit or phone contracts)
  • approval of a higher credit limit when you need it
  • easier approval or negotiating power when renting or buying property
  • lower car insurance premiums


How to build a good credit score


Building good credit takes time and effort. Adopt these habits to get started:


  • Keep the amount you spend on your credit card as low as possible. Try to maintain your maximum at 30%.
  • Always pay the minimum repayment, or more when possible.
  • Always make your payments on time.
  • Space out your credit applications at least six months apart, as multiple applications can drop your credit score.


If you have a negative credit score, you can turn things around by practising these good credit habits. And if you need extra help, take a look at your credit history and chat with a financial adviser who can give you professional assistance.


Find more tips on debt and credit, check out these blog posts:



The information in this article is for information purposes only and does not constitute professional advice.