Ways to Improve Your Credit Score Before Big Purchases
If you’re planning to buy your first home, finance a vehicle, or take out a personal loan, your credit score plays a major role in what lenders offer you. In New Zealand, your credit score can affect how much interest you’ll pay, how flexible your repayment terms are, or even whether you’ll be approved in the first place.
A low score doesn’t just make borrowing harder—it can make it more expensive. Credit agencies like Centrix and Equifax use your repayment history and current debt levels to calculate your score. Many Kiwis don’t realise that even a few late payments or a maxed-out credit card can pull their score down and limit their financial options.
The good news? Your credit score isn’t set in stone. With a few simple and consistent actions, you can start improving your score well before you apply for that loan or mortgage. Here’s how to get your finances in better shape and improve your credit rating.
1. Check Your Credit Report for Free
Before you do anything else, request your credit report from Centrix, Equifax, or Illion[A1] —New Zealanders are entitled to one free report from each agency per year.
These reports list your open accounts, repayment history, defaults, and recent credit enquiries.
Look through your report carefully. Check for errors like accounts you never opened, missed payments that weren’t actually late, or outdated details. If you spot anything wrong, lodge a dispute with the credit bureau. They’re required to investigate and correct verified mistakes.
Before applying for a mortgage, car finance, or any personal loans, it’s a good idea to check your credit report to see where you stand.
Fixing these issues early can give your credit score a boost—and save you stress when it’s time to borrow.
2. Get Up to Date With Missed Payments
Your payment history is one of the biggest factors that impact your credit score. If you’ve missed payments in the past—on a credit card, personal loan, or utility bill—those black marks can remain on your report for up to five years.
The sooner you catch up, the better. Contact your providers and try to work out a repayment plan if needed. Once your account is no longer in arrears, make sure to pay all upcoming bills on or before the due date. Consistent on-time payments are one of the fastest ways to rebuild your credit standing.
3. Reduce Balances on Credit Accounts
Most lenders look at your credit limit compared to how much of it you’re using. This is called your credit utilisation rate[A2] . If you’re close to maxing out your credit cards or store cards, it signals that you might be struggling to manage your debts.
Try to bring your balances down well below your credit limits. Paying more than the minimum each month helps reduce your overall debt faster and improves your credit profile. Even small repayments above the minimum can make a difference over time.
4. Keep Older Accounts Open and Active
You might think closing an old credit card is a smart move, but that’s not always the case. The length of your credit history plays a role in shaping your score. Older accounts show that you have long-term experience managing credit.
If the account is in good standing and has no fees, consider keeping it open. You don’t need to use it often, but making a small transaction every few months and paying it off on time can help keep the account active and boost your credit history.
5. Avoid Multiple Credit Applications at Once
Each time you apply for a new credit card, loan, or finance deal, a hard enquiry appears on your credit report. Too many enquiries in a short period can lower your score and make lenders more cautious.
Before a big purchase, try not to apply for unnecessary credit. If you’re shopping for a mortgage or car finance, do your comparisons within a tight time frame so they’re treated as a single event. Some lenders may offer pre-approval without a full credit check—this can help you plan without impacting your score.
6. Use Automatic Payments to Stay on Track
Missing a payment—even by a few days—can harm your credit score. With power, broadband, and other household bills coming in regularly, it’s easy to lose track. The easiest fix? Set up automatic payments through your internet banking. This ensures your bills are paid on time, every time.
You can also create reminders using your phone or email calendar to check upcoming due dates. Paying on time shows lenders you’re reliable, which builds trust and strengthens your credit profile. A clean payment history is one of the biggest steps you can take toward improving your score.
7. Ask for a Credit Limit Increase—But Don’t Use It
If you’ve been using your credit card responsibly, you might qualify for a credit limit increase. This doesn’t mean you should spend more. The idea is to widen the gap between your limit and what you owe.
A lower credit utilisation rate looks better to lenders. For example, if your limit increases from $3,000 to $5,000 and you still only use $1,000, your profile improves. Just contact your bank or card provider and ask about their policy. Some will do a soft check, which doesn’t affect your score, while others may run a full credit enquiry—so always ask first.
Improving your credit score doesn’t require drastic action—just smart, steady steps. Check your reports, pay your bills on time, and keep your balances in check. Avoid taking on too much new credit and think about how your actions today will affect your options tomorrow.
Whether you’re planning to buy a home, upgrade your car, or apply for finance, a stronger credit score can open doors to better terms and save you money. The earlier you begin making changes, the more time your credit file has to reflect them. Start now, and your financial future will thank you.
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