Regardless if we realise it or not, our credit report has a serious effect 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 realise 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 surprise to some, considering that even one overlooked payment that is reported by your financial institution can remain on your credit report for as much as seven years.
So, what is a credit report? A credit report is a report that points out information about your financial history with creditors. In recent times, credit reports have been revamped to place greater importance on constructive history such as 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 typically either get a pass or fail so any default irrespective of its severity can have a long-lasting effect on your financial opportunities for years to follow. Even though finding solutions to strengthen a bad credit report can be difficult, there are particular things you can do to improve it. The good news is, we’ve assembled a list of suggestions that you can try to strengthen your credit report and your general financial health.
Check 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 uncommon for oversights to be made on credit reports which can have a detrimental impact on your financial capabilities. Read your credit report carefully and dispute any mistakes that you discover to ensure your credit report accurately reflects your financial history. Some general oversights that can occur are:
- Errors in personal details
- Wrongful defaults and judgements
- Old defaults and judgements
- Incorrect information concerning your credit history
If you find any oversights, notify 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
People underestimate how critical it is to pay your bills on time. In some cases, individuals can be forgetful considering that they have too many bills to pay, so it’s a wise idea to get in touch with all your lenders and ask them to automatically debit your bank account each month. Normally, 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 on time and in full, 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 employed by the same workplace for over two years, or you are a property owner, 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 uncover that this kind of information is missing from your credit report, notify the credit reporting agency and ask that it be included.
Steer clear of too many credit applications
Each time you request a line of credit, it is documented on your credit report. Naturally, excessive applications for credit will have a harmful effect on your credit report and the way in which creditors view your financial behaviours. It is crucial that you are prudent and selective when requesting credit and only apply when you are optimistic it will be approved. Additionally, if you recently had a credit application turned down, wait a respectable amount of time before applying again.
Look into a debt consolidation loan
Generally, it can be very difficult to oversee your debts when then you have lots of them. Neglecting just one debt repayment can become a default, which will remain 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. Normally, interest rates on debt consolidation loans are fairly 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, speak to our friendly team at Bankruptcy Experts Whitsundays on 1300 795 575, or alternatively visit our website for additional information: www.bankruptcyexpertswhitsundays.com.au