Regardless if we realise it or not, our credit report has a substantial effect on our lives. It’s sort of like our health; we don’t treasure good health until we lose it. Lot of people don’t even learn that they have a poor credit report until they apply for a line of credit and it’s rejected. It can come as quite a shock to some, simply because even one missed payment that is reported by your lender can stay on your credit report for a maximum of seven years.
So, what is a credit report? A credit report is a document that points out information about your financial history with financial institutions. Recently, credit reports have been revamped to place greater importance on favourable history like 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 creditors review your credit report, you typically either get a pass or fail so any default irrespective of its severity can have a long-lasting influence on your financial opportunities for years to follow. Although finding solutions to improve a poor credit report can be difficult, there are specific things you can do to improve it. Luckily, we’ve put together a list of recommendations that you can try to improve your credit report and your overall financial health.
Review your credit report for any oversights
The first step is to inspect your credit report to learn exactly what it consists 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 errors to be made on credit reports which can have an undesirable impact on your financial capabilities. Read your credit report extensively and dispute any errors that you discover to make sure your credit report accurately mirrors your financial history. Some typical oversights that can occur are:
- Mistakes in personal information
- Wrongful defaults and judgements
- Old defaults and judgements
- Inaccurate information regarding your credit history
If you unveil any mistakes, alert the credit reporting agency in writing so these listings can be modified or removed to reflect your true credit history.
Pay your bills on time
Lots of 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 speak with all your lenders and ask them to automatically debit your bank account every month. Typically, your creditors would be more than happy to do this as posting paper invoices is time-consuming and costly. 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 particular details within your credit report which creditors will view positively. For instance, if you are married, have been working with the same workplace for over two years, or you are a homeowner, then this information will improve your credit report. Creditors usually view this information in a positive light and it can help you in future credit applications. If you see that this sort of information is missing from your credit report, alert 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. Clearly, too many applications for credit will have a negative effect on your credit report and the way in which lenders view your financial behaviours. It is essential that you are shrewd and selective when requesting credit and only apply when you are optimistic it will be accepted. Likewise, if you recently had a credit application declined, wait a decent amount of time before applying again.
Think about a debt consolidation loan
Naturally, it can be very complicated to control 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 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 fairly 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 with our friendly team at Bankruptcy Experts Brisbane on 1300 795 575, or alternatively visit our website for additional information: www.bankruptcyexpertsbrisbane.com.au