Whether we acknowledge it or not, our credit report has a serious influence on our lives. It’s sort of like our health; we don’t appreciate good health until we lose it. Lots of people don’t even realise they have a bad credit report until they make an application for a line of credit and it’s rejected. It can come as quite a shock to some, given that even one missed payment that is documented by your creditor can stay on your credit report for a maximum of seven years.
So, what is a credit report? A credit report is a record that stipulates details about your financial history with creditors. In recent years, credit reports have been revamped to place greater emphasis on favourable history like paying your bills on time, but overwhelmingly, credit reports are used by financial institutions to check your capability to repay debts by assessing your past behaviour.
When lenders review your credit report, you usually either get a pass or fail so any default irrespective of its severity can have a long-lasting impact on your financial opportunities for years to come. Whilst finding solutions to enhance a poor credit report can be tough, there are various things you can do to improve it. Fortunately, we’ve assembled a list of suggestions that you can try to strengthen your credit report and your overall financial health.
Examine your credit report for any oversights
The first step is to check your credit report to learn exactly what it consists of. You can do this by paying a modest fee to a firm like ‘Check My Credit File’ (https://www.mycreditfile.com.au). It’s not rare for oversights to be made on credit reports which can have a negative impact on your financial capabilities. Read your credit report thoroughly and challenge any errors that you discover to ensure your credit report appropriately emulates your financial history. Some common errors that can occur are:
- Mistakes in personal information
- Wrongful defaults and judgements
- Old defaults and judgements
- Incorrect information concerning your credit history
If you unmask any errors, notify the credit reporting agency in writing so these listings can be altered or removed to mirror your true credit history.
Pay your bills on time
A lot of people underestimate how critical it is to pay your bills on time. In some cases, people can be forgetful considering that they have too many bills to pay, so it’s an intelligent idea to talk to all your creditors and ask them to automatically debit your bank account each month. Generally, your creditors would be more than happy to do this as delivering paper statements is time-consuming and expensive. By placing all your bills on autopilot, you can be certain that they’ll be paid in full and on time, which will have a positive impact on your credit report
Add extra information to your credit report
There are certain details within your credit report which lenders will view positively. For example, if you are married, have been employed by the same company for more than two years, or you are a homeowner, then this information will boost your credit report. Creditors generally view this information in a positive light and it can assist in future credit applications. If you uncover that this type of information is missing from your credit report, notify the credit reporting agency and request that it be provided.
Keep away from too many credit applications
Each time you request a line of credit, it is recorded on your credit report. Naturally, too many applications for credit will have an unfavorable effect on your credit report and the way in which creditors view your financial behaviours. It is crucial that you are vigilant and selective when making an application for credit and only apply when you are optimistic it will be approved. In addition, if you recently had a credit application denied, wait a decent amount of time before applying again.
Think about a debt consolidation loan
Generally, it can be very difficult to control your debts when then you have lots of them. Forgetting just one debt repayment can turn into a default, which will remain on your credit report for a minimum of five years. Look into a single debt consolidation loan which will accumulate all your debts into one, single, monthly repayment. Generally, interest rates on debt consolidation loans are quite low, and you’ll eliminate any further defaults which will have a positive effect on your credit report. If you’re interested in a debt consolidation loan, get in touch with our friendly team at Bankruptcy Experts Taree on 1300 795 575, or alternatively visit our website for additional information: www.bankruptcyexpertstaree.com.au