Regardless if we understand it or not, our credit report has a meaningful influence on our lives. It’s sort of like our health; we don’t treasure good health until we lose it. Many individuals don’t even learn that they have a poor 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, given that even one overlooked payment that is reported by your creditor can remain on your credit report for a maximum of seven years.
So, what is a credit report? A credit report is a record that specifies details about your financial history with lenders. Recently, credit reports have been redesigned to place greater importance on constructive history such as paying your bills on time, but overwhelmingly, credit reports are used by lenders to analyse your capability to repay debts by assessing your past behaviour.
When lenders check your credit report, you usually either get a pass or fail so any default regardless of its severity can have a long-lasting impact on your financial prospects for years to come. Whilst finding solutions to improve a bad credit report can be difficult, there are specific things you can do to boost it. The good news is, we’ve put together a list of recommendations that you can try to enhance your credit report and your overall financial health.
Review your credit report for any errors
The first step is to check your credit report to uncover exactly what it features. 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 rare for oversights to be made on credit reports which can have a detrimental effect on your financial abilities. Read your credit report carefully and dispute any mistakes that you find to ensure your credit report accurately emulates your financial history. Some common mistakes that can occur are:
- Errors in personal information
- Wrongful defaults and judgements
- Old defaults and judgements
- Incorrect information concerning your credit history
If you find any mistakes, advise 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
Individuals underestimate how important it is to pay your bills on time. Occasionally, individuals can be forgetful considering that they have too many bills to pay, so it’s a wise idea to speak with 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 invoices is time-consuming and expensive. 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 additional information to your credit report
There are certain details within your credit report which lenders will view favourably. For instance, if you are married, have been working with the same workplace for more than two years, or you are a property owner, then this information will boost your credit report. Lenders commonly view this information in a positive light and it can help you in future credit applications. If you discover that this sort of information is missing from your credit report, alert the credit reporting agency and ask that it be provided.
Steer clear of too many credit applications
Each time you apply for a line of credit, it is mentioned on your credit report. Evidently, too many applications for credit will have a negative impact on your credit report and the way in which creditors view your financial behaviours. It is essential that you are reasonable and selective when requesting credit and only apply when you are confident it will be approved. In addition, if you recently had a credit application declined, wait a decent amount of time before applying again.
Look into a debt consolidation loan
Naturally, it can be very tough to manage your debts when then you have lots of them. Forgetting just one debt repayment can turn into a default, which will stay 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, speak to our friendly team at Bankruptcy Experts Coffs Harbour on 1300 795 575, or alternatively visit our website for additional information: www.bankruptcyexpertscoffsharbour.com.au