Whenever you apply for credit, lenders will take a close look at your credit score. Your credit score is basically a track record of how you’ve handled borrowed money in the past.

Your credit score takes into consideration how well you paid back past loans and gives an indication of the type of risk you present as a borrower.

Many people don’t realise that some of their spending habits can weigh negatively on their credit score. This could make it harder to obtain finance and might see you paying a higher interest rate on future loans.

Here are 3 things that could be weighing down your credit score:

Late or missed payments

If there’s one thing that you need to do to maintain a good credit score, it’s making sure you always pay your debts and bills on time. Missed payments or consistent late payments could negatively impact your credit score and lead to late payment fees and additional interest charges.

If you want to maintain or even improve your credit score, it’s good practice to pay your bills as soon as you receive them. It’s also worth looking at scheduling automated payments to make sure you never miss a payment.

Applying for credit too many times

Each time you apply for credit it’s recorded in your credit report as an enquiry. This is one of the lesser-known factors that can impact your credit score.

If you apply for credit too many times in a short period of time, this is going to weigh on your credit score and may act as a red flag to a lender. It is so important to research lenders ahead of time, so that you’re applying for the most suitable loan that meets your personal and financial situation.

If you’re unsure about all the lending options, speaking with a mortgage broker who can compare different lenders and loan products is normally a good idea to help you protect your credit score.

Keeping track of your credit score

Keeping track of your credit score has never been easier, with a host of free online sites that provide up-to-date reports.

Apart from just monitoring your score, it’s also critical that you look to see if there are any errors on your report, such as a late payment, an incorrect charge or an overdue bill. These issues can hurt your score through no fault of your own.

If you find any errors, you can contact the credit report agency to query it and have it amended.

If you continue to pay your bills on time and are diligent with monitoring your credit score, you can gradually improve it and help your chances of securing finance when you really need it.