|June 20, 2018||Comments Closed|
Whether we understand it or not, our credit report has a considerable effect on our lives. It’s kind of like our health; we don’t appreciate good health until we lose it. Most people don’t even learn that 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, since even one missed payment that is reported by your financial institution can remain on your credit report for up to seven years.
So, what is a credit report? A credit report is a document that stipulates information about your financial history with creditors. In recent times, credit reports have been redesigned to place greater focus on favourable history such as paying your bills on time, but overwhelmingly, credit reports are used by lenders to evaluate your ability to repay debts by assessing your past behaviour.
When financial institutions check your credit report, you generally 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 follow. Although finding solutions to strengthen a bad credit report can be tough, there are certain things you can do to strengthen it. The good news is, we’ve put together a list of suggestions that you can try to enhance your credit report and your overall financial health.
Check your credit report for any errors
The first step is to review your credit report to find 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 uncommon for errors to be made on credit reports which can have a detrimental influence on your financial abilities. Read your credit report thoroughly and dispute any mistakes that you find to make sure your credit report appropriately reflects your financial history. Some common mistakes that can occur are:
If you find any errors, inform the credit reporting agency in writing so these listings can be adjusted or removed to emulate your true credit history.
Pay your bills on time
Lots of people underestimate how critical it is to pay your bills on time. In some cases, people can be forgetful simply because they have too many bills to pay, so it’s a wise idea to speak to all your lenders and ask them to automatically debit your bank account each month. Normally, your lenders would be more than happy to do this as posting paper statements is time-consuming and expensive. By putting all your bills on autopilot, you can be sure 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 specific details within your credit report which creditors will view favourably. As an example, if you are married, have been working for the same company for over two years, or you are a homeowner, then this information will improve your credit report. Creditors typically view this information in a positive light and it can assist in future credit applications. If you discover that this kind of information is missing from your credit report, notify the credit reporting agency and request that it be included.
Keep away from too many credit applications
Each time you make an application for a line of credit, it is recorded on your credit report. Clearly, excessive applications for credit will have a damaging effect on your credit report and the way in which creditors view your financial behaviours. It is crucial that you are shrewd and selective when applying for credit and only apply when you are optimistic it will be accepted. Also, if you recently had a credit application declined, wait a decent amount of time before applying again.
Look at a debt consolidation loan
Certainly, it can be very complicated to control your debts when then you have lots of them. Overlooking just one debt repayment can turn into 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. Usually, 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, contact our friendly team at Bankruptcy Experts Bendigo on 1300 795 575, or alternatively visit our website for additional information: www.bankruptcyexpertsbendigo.com.au