10 ways to improve your credit score

It’s a simple formula: the higher your credit score, the lower your risk of defaulting—at least in the eyes of lenders.

Lower risk means lenders are more likely to lend to you, and to offer their best rates. Higher risk, on the other hand, can make it harder to be approved for credit—and if you are approved, you’ll likely be offered less favourable terms until your credit improves.

The good news? Everyone can benefit from improving their credit score, even if you already have a good credit history. This is one area of life where you really can’t have too much of a good thing. And with the introduction of comprehensive credit reporting, you now have more power than ever to improve your score.

Whatever your credit file looks like, here are 10 ways to improve your credit rating, lower your perceived risk, and enjoy more financial freedom:

1. Keep on top of your payments

Don’t miss a single payment on your credit cards, mortgage, car loan, or any other credit accounts for 24 months, and you’ll start building a spotless repayment history.

2. Don’t forget about utilities

Depending on the credit reporting agency, your payment history for utilities, phone contracts, and other accounts can also be factored in—so keep these in good standing too.

3. Pay by direct debit

Set up automatic payments to avoid missed deadlines. Just make sure there are always enough funds in your account when payments are due!

4. Demonstrate financial control

Keep your credit card limit fairly low. Your credit report shows the limit on your card—not the balance. A high limit may make it look like you have more potential debt than you can manage, while a lower limit can appear more responsible and lower risk.

5. Check your credit report

Request free copies of your credit report from all three of New Zealand’s credit reporting agencies. Review them carefully and address any issues or errors that may be affecting your score.

6. Dispute any errors

If you find a mistake on your report, contact the credit agency. They’ll investigate and remove the entry if the lender can’t provide evidence to support it.

7. Pay off any defaults

If you’ve defaulted on a loan or credit card, pay it off as soon as you can. The default will stay on your report for five years, but if it's marked as “paid,” it won’t drag your score down as much as an unpaid one.

8. Talk to your lenders

If you’re worried about missing a payment, talk to your lender early. You might be able to adjust your repayment terms—helping you avoid a default and stay in control.

9. Only borrow when you need to

Avoid taking out credit unless you’re confident you can manage the repayments. Missed payments can damage your credit score and make it harder to borrow in future.

10. Get older

You don’t have much control over this one—but age can help! A longer credit history provides more data for lenders to assess. With time, you're also more likely to have built a track record across a range of financial responsibilities—like mortgages, utilities, or car loans—and shown how you manage credit through life’s ups and downs.