6 tips to help your credit health as interest rates climb

Women looking at credit bills

Home and personal loan interest rates are set to rise following the RBA’s recent decision to raise the cash rate to 4.35%, adding pressure to many loan holders. 

While it might not be top of mind, now is as important as ever for Aussies to focus on their credit health to help them manage this additional financial stress. 

It can feel overwhelming when it comes to credit. Chief executive of the Australian Retail Credit Association & CreditSmart.org.au, Elsa Markula has provided Mozo with some ideas to help you get started. 

If you’re worried about rising interest rates, or just want to support your credit health - here are 6 tips to help you get on track.

Let's get into how to use these tips and what they can do for you. 

1. Stay on top of payments

Rule number one for good credit, pay on time. This is easier said than done, but factoring your payments into your budget and planning ahead of time can help keep you on track. If you need some help planning, use our budget calculator to get organised.

2. Track and sort expenses

It may not seem relevant to your loan, but your everyday spending and expenses are important to factor into your budgeting when looking at repayment plans. Rising costs and repayments may have an impact on how much you are able to spend, so knowing your expense history can help inform future decisions.

3. Get creative with your income

I know, if you could earn more money you’d probably be doing it. This one is a tough one, and not practical for everyone. But, if you’re really going to be stung by repayments it might be time to ask for some extra hours or sell some of those household items you don’t use as much as you should.

4. Shop around for cheaper bills

A reduced number on your monthly bill is a win for you and for your credit if it means you will be able to pay on time. You can compare your energy plan or consider looking at a new broadband for the end of 2023. 

5. Reach out early

Lenders have processes in place for those who are experiencing financial hardship, so if you are having difficulty - the sooner you reach out the better. You will most likely have more options available to help you get out of a hard place.

6. Try to lower your interest rate

If you currently have a loan, it could be worthwhile to reach out to your lender and negotiate a lower interest rate for the life of your loan. If you are looking to take out a loan, comparing loan interest rates is the best way to lower your interest rate. 

If you are looking for a home loan, you can compare home loan providers online. For personal loans, check out some of our editors' picks for best personal loans, or compare providers below.

Compare personal loan providers - last updated 23 May 2024

Search promoted personal loans below or do a full Mozo database search. Advertiser disclosure
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* WARNING: The Comparison Rate combines the lender's interest rate, fees and charges into a single rate to show the true cost of a personal loan. The comparison rates displayed are calculated based on a loan of $30,000 for a term of 5 years or a loan of $10,000 for a term of 3 years as indicated, based on monthly principal and interest repayments, on a secured basis for secured loans and an unsecured basis for unsecured loans. This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

^See information about the Mozo Experts Choice Personal Loan Awards

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