Order your favorite food, get a new pair of shoes or organize a trip from A to B – every millennial is sure to have done at least one of them with their smartphone.
While the ultimate dream is to have the world within your grasp, there is a certain level of responsibility. From the moment you start using credit, Buy Now, Pay Later (BNPL), or when your name is on an electric bill, your money habits will determine your creditworthiness.
While you may think your creditworthiness is not a big deal now, whether a home loan is approved or denied later could make a difference.
“In 2020 we saw the boom in Buy Now Pay Later services like Afterpay and Zip. But very few young Aussies know that these services can affect your chances of future borrowing, ”said the co-founder of Fintech, River, Justin Joffe.
“Imagine your bank rejecting your home loan application in 5 years’ time because they missed repayment for the Mecca shopping spree or the Nintendo Switch you bought on a whim.”
According to the river, More than one in two Australians has problems with financial literacy, such as how to keep your creditworthiness green.
Flux is one of the many tools that are helping younger Aussies capitalize on their financial freedom and ensure that their relationship with money is positive.
What is flux?
Founded by three school friends in January 2020, flow is a smartphone app that makes understanding tricky money matters a breeze.
At its core, the Flux app is a free tool that makes money entertaining. It helps you monitor your creditworthiness, but it’s also a place to stay on top of financial news and learn more about personal finance.
They are also in the process of introducing a new feature called Win the Week, which allows users to compete every week to win $ 25,000 when they add $ 25 to their savings account!
“When we were studying and then entering professional life, we really wanted to learn more about business and personal finances. But we felt really disconnected and disconnected from the content and tools available, ”said Joffe.
“Our mission is to make the topic of money as culturally relevant as sport, music or art.”
Why is it important to monitor my creditworthiness?
Our creditworthiness can be critical in helping you meet your future financial goals. Let’s break it down.
Your credit score, which is a number between 0 and 1200, tells a lender how reliable you can be in making loans. Your creditworthiness is built by a number of factors, such as: B. Are you paying your bills on time and your credit management experience.
As you’ve probably guessed by now, the better your creditworthiness, the more attractive you will appear to a lender. And thanks to a little thing called Open banking, it also means you have the opportunity to ask for a better deal on products.
Open banking refers to a new system that gives consumers the ability to share their banking information, such as their creditworthiness, with other financial institutions. And so banks and lenders can then offer their customers more competitive personalized interest rates.
Checking your creditworthiness in the Flux app is very easy: All you have to do is enter a few personal details such as your name, address and license number and you’re good to go.
“We know it is critical to develop the right financial habits early in life. These habits can often have a snowball effect that can result in one of two ways: increasing debt or financial prosperity, ”said Joffe.
“We assume that checking your creditworthiness in the register is a really easy way to keep track of where you are financially.”
How can I improve my credit rating?
The good news is that your creditworthiness is not set in stone and will change over time as you build your profile. How to keep your score in tip top shape:
- Know where you are – Before you can start working, it is important to understand your financial situation by requesting a free copy of your credit report. There are a number of places you can access it from such as Experian, Equifax, and of course, Flux.
- Pay off outstanding debts – Whether it’s remaining credit card debt or an unpaid bill, make it your priority to clear any outstanding payments as quickly as possible. Australia has a positive credit reporting system. This means that both your good and bad habits will be recorded. So always try to make the minimum repayments on or before the due date if you can’t pay your bills in full.
- Do not apply for multiple loan products – While you are working to build or repair your credit history, it is best to avoid applying for multiple new loan products. This is because every time you apply it is recorded and multiple inquiries about your history might not seem overly financially responsible in the eyes of a potential lender.
If you need more tips How To Improve Your Credit Score, read our guide.
Where can I get the Flux app?
You can download the Flux app for free from the Apple App Store.
Do you want to stream fintech news from multiple taps? Then add ours Fintech hub to the list! It is filled with the latest developments and findings in the fintech field.
* Flux is a commercial partner of Mozo who uses our systems to enable product applications from within their app.
