Regardless if we realise it or not, our credit report has a significant effect on our lives. It’s sort of like our health; we don’t treasure good health until we lose it. Most individuals don’t even know they have a bad credit report until they make an application for a personal line of credit and it’s disapproved. It can come as quite a shock to some, simply because even one overlooked payment that is reported by your lender can stay on your credit report for up to seven years.
So, what is a credit report? A credit report is a report that specifies details about your financial history with creditors. In recent years, credit reports have been overhauled to place greater attention on constructive history like paying your bills on time, but overwhelmingly, credit reports are used by financial institutions to analyse your ability to repay debts by assessing your past behaviour.
When financial institutions review your credit report, you commonly either get a pass or fail so any default regardless of its severity can have a long-lasting influence on your financial possibilities for years to follow. Even though finding solutions to improve a poor credit report can be tricky, there are particular things you can do to enhance it. The good news is, we’ve assembled a list of ideas that you can try to strengthen your credit report and your general financial health.
Inspect your credit report for any mistakes
The first step is to review your credit report to uncover exactly what it features. You can do this by paying a modest fee to a business like ‘Check My Credit File’ (https://www.mycreditfile.com.au). It’s not rare for errors to be made on credit reports which can have a negative impact on your financial capabilities. Read your credit report carefully and dispute any errors that you find to make sure your credit report accurately emulates your financial history. Some typical oversights that can occur are:
- Errors in personal details
- Wrongful defaults and judgements
- Old defaults and judgements
- Inaccurate information concerning your credit history
If you unveil any errors, inform the credit reporting agency in writing so these listings can be modified or removed to mirror your true credit history.
Pay your bills on time
People underestimate how critical it is to pay your bills on time. Occasionally, people can be forgetful simply because they have too many bills to pay, so it’s a smart idea to speak with all your lenders and ask them to automatically debit your bank account each month. Usually, your lenders would be more than happy to do this as posting paper statements is time-consuming and costly. By putting all your bills on autopilot, you can be certain that they’ll be paid on time and in full, which will have a positive effect on your credit report
Add extra information to your credit report
There are a number of details within your credit report which lenders will view positively. For instance, 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 normally view this information in a positive light and it can assist in future credit applications. If you discover that this type of information is missing from your credit report, inform the credit reporting agency and ask that it be provided.
Steer clear of too many credit applications
Every time you make an application for a line of credit, it is noted on your credit report. Evidently, too many applications for credit will have a damaging effect on your credit report and the way in which lenders view your financial behaviours. It is very important that you are shrewd and selective when requesting credit and only apply when you are confident it will be accepted. In addition, if you recently had a credit application rejected, wait a decent amount of time before applying again.
Contemplate a debt consolidation loan
Of course, it can be very complicated to manage your debts when then you have lots of them. Neglecting just one debt repayment can turn into a default, which will remain on your credit report for a minimum of five years. Take into consideration a single debt consolidation loan which will accumulate all your debts into one, single, monthly repayment. Commonly, 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 contact with our friendly team at Bankruptcy Experts Newcastle on 1300 795 575, or alternatively visit our website for more information: www.bankruptcyexpertsnewcastle.com.au