Whether we realise it or not, our credit report has a meaningful influence on our lives. It’s kind of like our health; we don’t cherish good health until we lose it. Lots of people don’t even find out 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 bombshell to some, simply because even one missed payment that is reported by your financial institution 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 points out information about your financial history with financial institutions. Recently, 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 creditors to examine your capability 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 effect on your financial possibilities for years to follow. Although finding solutions to strengthen a poor credit report can be complicated, there are a number of things you can do to enhance it. The good news is, we’ve compiled a list of recommendations that you can try to improve your credit report and your general financial health.
Review your credit report for any errors
The first step is to check your credit report to find out exactly what it comprises 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 errors to be made on credit reports which can have a negative impact on your financial abilities. Read your credit report thoroughly and dispute any oversights that you find to make sure your credit report appropriately mirrors your financial history. Some typical mistakes that can occur are:
- Errors in personal information
- Wrongful defaults and judgements
- Old defaults and judgements
- Inaccurate information regarding your credit history
If you unmask any errors, notify 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 crucial it is to pay your bills on time. In some cases, individuals can be forgetful simply because they have too many bills to pay, so it’s an intelligent idea to call all your lenders and ask them to automatically debit your bank account each month. Often, your lenders would be more than happy to do this as posting paper statements is time-consuming and expensive. By placing all your bills on autopilot, you can be sure that they’ll be paid in full and on time, which will have a positive effect on your credit report
Add extra information to your credit report
There are specific details throughout your credit report which creditors will view positively. For instance, if you are married, have been working for the same workplace for over two years, or you are a property owner, 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 see that this kind of information is missing from your credit report, advise the credit reporting agency and ask that it be added.
Avoid too many credit applications
Each time you apply for a line of credit, it is mentioned on your credit report. Obviously, too many applications for credit will have an unfavorable impact on your credit report and the way in which creditors view your financial behaviours. It is very important that you are shrewd and selective when applying for credit and only apply when you are optimistic it will be accepted. Moreover, if you recently had a credit application declined, wait a decent amount of time before applying again.
Contemplate a debt consolidation loan
Generally, it can be very tough to control your debts when then you have lots of them. Neglecting just one debt repayment can become a default, which will stay on your credit report for at least five years. Contemplate 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 effect on your credit report. If you’re interested in a debt consolidation loan, reach out to our friendly team at Bankruptcy Experts Mackay on 1300 795 575, or alternatively visit our website for additional information: www.bankruptcyexpertsmackay.com.au