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OurTips-P2P-Investing-OurMoneymarket 5 Simple Ways to Improve Your Credit Score

A couple of months ago I wrote an article outlining the 3 Big Mistakes You Make That Stop You Getting a Loan. The article highlighted a number of common mistakes you make that negatively impact your credit score. Today’s article highlights 5 Simple Ways to Improve Your Credit Score, so you can obtain the loan you need or the interest rate you deserve.

#1 Check Your Credit File for Errors

An estimated 30% of credit files in Australia contain errors in them. Removing errors in your credit file can be an easy way to improving your credit score. Some common mistakes include:

  • Incorrect information on how long you’ve been with your current employer; or
  • Incorrect information on your current address or how long you’ve been at your current address.
  • More serious errors to look out for include:

  • Incorrect credit enquiries or duplicate credit enquiries from the same lender; or
  • Prior defaults, judgements or court writs that have since settled, but appear as outstanding on your credit file.
  • Removing these errors from your credit file can go a long way to significantly improving your credit score.

    You can obtain a free copy of your credit file from

    Note: Look out for lenders that make additional credit enquiries for slight variations in your loan application. They may do this despite making an enquiry only the day before. To avoid the risk of duplicate credit enquiries always ask your lender if your credit variation or credit increase will result in a further credit enquiry.

    #2 Start Building a Credit Story

    The age and diversity of your credit file is an important factor in determining your credit score. For those that have never had a credit contract in their name, consider opening a basic credit account as soon as possible (e.g. a mobile phone contract). For those of us who have an existing credit record, check that your name is on all credit contracts you’re paying for – there may be an old mobile phone contract that’s still recorded under your parents’ names that you should get the benefit of!

    In addition to this, having a variety of credit contract types (e.g. a home loan, mobile contract, credit card and/or personal loan) can help improve your credit score in the long run. Obviously, the key is to making sure you manage all these credit accounts responsibly, and making sure that when applying you comply with point #3 below.

    #3 Stop Making ‘Bulk’ Loan Applications

    Don’t make multiple credit applications across different lenders during a short period of time. It is one of the worst things you can do for your credit score. To the credit bureaus this looks like you lack financial control or are financially desperate. Stopping this behaviour is a great way to improve your credit score.

    Always do your research before applying for credit and, if possible, get an early indication from the lender on whether you will be approved for the credit amount you need. For example, with OurMoneyMarket you can obtain a rate quote for a personal loan in minutes, without it impacting your credit score. We’ll also test whether you meet our eligibility criteria so you’ll know if you have a good chance of getting a loan before you proceed.

    #4 Take a Break from Applying for Credit

    Time heals all wounds. This has never been truer when it comes to improving your credit score. Taking a break from applying for credit will improve your credit score, especially if you have a track record of making multiple applications during a short period of time.

    Now, for those that need credit to make a purchase or consolidate debt, this is understandably not a solution, however for those that are frequently seduced by the latest credit card promotions, maybe think twice about whether it is worthwhile in the long run.

    #5 Make Payments on Time

    It sounds simple, but ensuring all your financial commitments are paid on time is a perfect way to improving your credit score. An easy solution to managing your payments is to establish direct debit arrangements for all your credit contracts.

    If you’re finding your existing debt repayments too difficult to manage, consider consolidating your debts into one easy to manage personal loan. You can obtain a free rate quote here.


    Understanding how credit scores work can get a bit confusing at times, especially when the best methods to use in order to improve your credit score can appear contradictory. So what are our tips in a nutshell? In short, check your file at least annually for errors, put in place methods to ensure you make all your payments on time and when applying for credit wait for the lender to respond before going elsewhere, or preferably, apply with lenders that offer you a pre-approval process that won’t impact your credit score.

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    5 Simple Ways to Improve Your Credit Score – Source: OurMoneyMarket Lending Pty Ltd ABN 64 605 231 669 Australian Credit Licence 488228.

    OurTips-P2P-Investing-OurMoneymarket 3 Big Mistakes You Make That Stop You Getting A Loan

    Before jumping into the 3 big mistakes you’re making that can impact your chances of obtaining a loan. I have a few questions.

    Do you know what your credit score is?

    If you don’t know what your credit score is it’s worthwhile finding out. You can do this for free via Credit Savvy, Credit Simple and Get Credit Score. Forewarning, by obtaining your credit score from these websites you can expect to receive emails offering you credit (not from us, as we don’t have any affiliation with them, but from our competitors).

    So, what is a credit score?

    In short, it is a number that represents your “creditworthiness” and provides an indication to lenders of the likelihood of something “bad” happening on your credit file in the next 12 months (e.g. bankruptcy, consumer and commercial defaults etc.). A diagram of Equifax’s credit scores and what they generally mean in terms of credit quality is below.

    OurTips-P2P-Investing-OurMoneymarket 3 Big Mistakes You Make That Stop You Getting A Loan

    With Equifax (previously Veda) your score can range from -200 to 1200. The higher the score the better, for example, a score of 600 means there is a 5.88% chance that something “bad” will happen on your file in the next 12 months.

    What do you think your score is?

    I guessed mine would be at least around 750 (i.e. “Very Good”). I’ve never defaulted on any loan, I’ve never missed a payment, though as I’m relatively young I figured the “age” of my credit file might go against me (i.e. not much data to draw on). Well I was wrong. My credit score is 518 (i.e. “Average”) …Ouch! So how did this happen?

    Well I made the same mistakes a lot of people make. Here are 3 common mistakes that impact your credit score and your ability to get a loan or the interest rate you deserve.

    #1 Don’t Get Sucked into New Credit Card’s Unless You Really Need It

    This was my downfall. Oh, the glory of 50,000 frequent flyer points for just signing up to a new credit card with ABC Bank – “I’ll just get a few of these bad boys and my dream holiday to Argentina will be sorted”. Sadly, each time you make a credit enquiry it impacts your credit score. Below is what happened to me the last time I opened up a new credit card:

    • Credit Score Prior to Credit Card Enquiry = 554

    • Credit Score After Credit Card Enquiry = 518

    My score dropped 36 points! Suggesting that I was now 2% more likely to have a “bad” event occur on my credit file in the next 12 months.

    Now I did this quite a few times over a couple of years (flights to Argentina are expensive and points aren’t worth what they used to be), and I know I’m not alone in doing so. It does seem unfair. My behaviour as a borrower didn’t change. I always honour my commitments. I didn’t even need the credit card. To the credit bureau’s however, the pattern of my enquiries suggested desperation and I was penalised for it.

    So what do you do if you actually need a credit card or personal loan, but are worried about the enquiries impacting your credit score? Check whether the lender has a “pre-approval” process. For example, with OurMoneyMarket you can obtain a rate quote for a personal loan in minutes, without it impacting your credit score! We’ll also test whether you meet our eligibility criteria too so you’ll know if you have a good chance of getting a loan before you proceed.

    #2 Avoid Payday Lenders If You Can

    So not only do enquiries impact your credit score, but the type of enquiry also impacts it too. This is particularly the case when making an enquiry with a ‘Payday’ lender, but also applies for credit cards.

    What is a payday lender?

    A payday lender typically provides loans of up to $2,000 with repayment terms between 16 days to 1 year. They will often charge interest rates in excess of 45% (sometimes in the hundreds), promise you quick cash within an hour and from time to time can be seen in advertisements dressed as bunnies or wizards!

    Sadly, we’ve seen some good borrowers badly impacted by payday loan enquiries, which prevented them from accessing credit 12-24 months later. Unfortunately, these borrowers had no idea the ‘Payday’ lender was considered “high-risk” by the credit bureaus. So, please check the terms and conditions before applying for a loan. If the interest rate is 45%+ or is for an amount less than $2,001, then there’s a good chance its considered ‘Payday’.

    #3 Don’t Let Your Broker Run Wild

    There are many people who have had great experiences with brokers, however sometimes it can go horribly wrong. Please keep a check on your broker and don’t let them “shop you around” to lenders, as all these enquiries will negatively impact your credit score and just make things worse.

    In the case of home loans, Mortgage Managers are hard to come by, but companies such as Mortgage Direct, make it their business of knowing the “in’s and out’s” of lender’s credit policies when it comes to home loans. They can be helpful in giving you an indication of whether your home loan will be approved without impacting your credit score.

    Can I Fix My Credit Score?

    Yes, you can. However, we’ll explore this in detail in a future article.

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    Sometimes a little disruption can be a good thing.

    A new concept called “marketplace lending” is shaking up traditional financial markets, which have remained rigid and fixed for far too long. For years, people with strong credit histories sought out loans but weren’t rewarded with the better rates they deserved. At the same time, people with less-than-perfect credit were excluded from accessing the loans they needed. This was partly due to the fact that traditional financial institutions had exclusive rights to fund these loans.

    In the past few years, however, advanced technology has brought greater transparency, immediacy and disintermediation to financial markets, enabling all investors the opportunity to share in the profits of asset classes previously only available to traditional lenders.

    The sharing economy and peer-to-peer networks are redefining business models in every industry. It has become clear that mainstream financial policies, such as those used by traditional lenders, are in need of an upgrade. OurMoneyMarket is happy to do our bit in helping make money move more freely and quickly between borrowers and investors.

    EMM1003_image_only Welcome to OurMoneyMarket!

    What Is Marketplace Lending?

    Like any great deal you see online these days, marketplace lending is a high-tech twist on a very old idea. For hundreds of years, people have lent money to other people they trusted. Marketplace lending starts with that same idea, but it uses the latest technology to create a secure online platform for managing peer-to-peer arrangements like these on a massive scale.

    This means borrowers have greater choice, with access to a wider variety of “lenders”, and investors of all sizes can gain access to alternative fixed-income asset classes that offer attractive rates of return.

    How Do Borrowers Benefit?

    The OurMoneyMarket website makes it easier for you to get approved for the loan you need. In the past you would have to go from bank to bank, having awkward face to face conversations, some of which would result in a “No” due to the banks rigid credit policies. Each rejection would hurt your credit and make it harder for you to get a loan in the future. Now you can simply go to OurMoneyMarket, obtain a free rate quote within minutes, and post your loan request online. When enough investors sign on to share in the risk, your loan is approved. Think of it like crowdfunding for personal loans – but don’t worry as a borrower you don’t have to deal with hundreds of investors! They won’t even know who you are. You just deal with us.

    How Do Investors Benefit?

    Traditional lenders restricted investor access to these asset classes because they were more risky than say, term deposits, but also because the returns were so attractive. They wanted to retain the loan exposure themselves.

    These asset classes are perfect for rounding out a diversified portfolio and are now available for your investment, from as little as $50 in any single loan. OurMoneyMarket gives you the ultimate dashboard to build a portfolio and fine tune your risk and reward profile. You can invest in a wide range of borrowers, geographic locations, loan grades, loan terms and target rates of return. It’s your money. Invest where you want and how you want.

    OurMoneyMarket Principles

    It’s simple. We believe in giving “Credit Where Credit’s Due”. You would think that everyone could agree on that, but financial markets have a history of running by their own rules. We intend to change that by rewarding good borrowers with better rates and borrowers who have recently improved their credit performance a second chance at repaying a loan. That also means investors who believe in these loan seekers deserve to make a good return on their good faith.

    That ties into our second principle of transparency. There are no early exit fees, no prepayment fees and interest rates are tailored to match each borrower’s unique circumstances. Surprises belong in parties, not loans.

    Our third principle is access. Borrowers deserve a simple, easy-to-use loan. We make maximum use of new technology to create a 100-percent online process with 0-percent confusing paperwork. No fuss, no run-around.

    We also believe investors deserve an efficient, transparent and intelligent platform, so they have the flexibility and control they need when it comes to investing in loans.

    Are You In?

    OurMoneyMarket is now your money market. You deserve it and it’s long overdue. Sign up today and become a part of the new financial revolution.

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