Regardless if we understand it or not, our credit report has a notable impact on our lives. It’s kind of like our health; we don’t treasure good health until we lose it. Many people don’t even find out they have a poor credit report until they make an application for a personal line of credit and it’s rejected. It can come as quite a bombshell to some, given that even one missed payment that is disclosed 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 specifies information about your financial history with lenders. In recent times, credit reports have been redesigned to place greater importance on favourable history such as paying your bills on time, but overwhelmingly, credit reports are used by creditors to evaluate your capability to repay debts by assessing your past behaviour.
When creditors inspect your credit report, you typically either get a pass or fail so any default regardless of its severity can have a long-lasting effect on your financial possibilities for years to follow. Whilst finding solutions to repair a poor credit report can be complicated, there are certain things you can do to improve it. The good news is, we’ve assembled a list of suggestions that you can try to improve your credit report and your overall financial health.
Examine your credit report for any errors
The first step is to inspect your credit report to discover exactly what it comprises of. You can do this by paying a small fee to a firm like ‘Check My Credit File’ (https://www.mycreditfile.com.au). It’s not unusual for mistakes to be made on credit reports which can have a detrimental effect on your financial capabilities. Read your credit report carefully and dispute any mistakes that you discover to make sure your credit report appropriately mirrors your financial history. Some general errors that can occur are:
- Mistakes in personal details
- Wrongful defaults and judgements
- Old defaults and judgements
- Incorrect information concerning your credit history
If you discover any oversights, inform the credit reporting agency in writing so these listings can be modified or removed to reflect your true credit history.
Pay your bills on time
A lot of people underestimate how valuable it is to pay your bills on time. Sometimes, individuals can be forgetful simply because they have too many bills to pay, so it’s a clever idea to talk to all your lenders and ask them to automatically debit your bank account each month. Often, your creditors would be more than happy to do this as delivering paper invoices is time-consuming and costly. By putting 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 specific details within your credit report which creditors will view favourably. For example, if you are married, have been working with the same company for over two years, or you are a homeowner, then this information will strengthen your credit report. Creditors typically view this information in a positive light and it can assist in future credit applications. If you uncover that this kind of information is missing from your credit report, notify the credit reporting agency and ask that it be provided.
Keep away from too many credit applications
Every time you request a line of credit, it is documented on your credit report. Evidently, too many applications for credit will have a harmful effect on your credit report and the way in which lenders view your financial behaviours. It is paramount that you are sensible and selective when requesting credit and only apply when you are confident it will be accepted. Likewise, if you recently had a credit application declined, wait a respectable amount of time before applying again.
Think about a debt consolidation loan
Certainly, it can be very challenging to oversee 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 at least five years. Look into a single debt consolidation loan which will accumulate all your debts into one, single, monthly repayment. Normally, interest rates on debt consolidation loans are quite low, and you’ll eliminate any further defaults which will have a positive impact on your credit report. If you’re interested in a debt consolidation loan, get in touch with our friendly team at Bankruptcy Experts Albury on 1300 795 575, or alternatively visit our website for additional information: www.bankruptcyexpertsalbury.com.au