Regardless if we understand it or not, our credit report has a substantial influence on our lives. It’s kind of like our health; we don’t cherish good health until we lose it. Many people don’t even know they have a bad credit report until they apply for a line of credit and it’s disapproved. It can come as quite a bombshell to some, given that even one overlooked payment that is disclosed by your financial institution can stay on your credit report for as much as seven years.
So, what is a credit report? A credit report is a document that points out information about your financial history with creditors. Recently, credit reports have been redesigned to place greater focus on favourable history like paying your bills on time, but overwhelmingly, credit reports are used by financial institutions to calculate your ability to repay debts by assessing your past behaviour.
When creditors review your credit report, you generally either get a pass or fail so any default regardless of its severity can have a long-lasting influence on your financial possibilities for years to follow. Even though finding solutions to enhance a bad credit report can be difficult, there are particular things you can do to enhance it. The good news is, we’ve gathered a list of recommendations that you can try to strengthen your credit report and your general financial health.
Examine your credit report for any errors
The first step is to review your credit report to find out exactly what it comprises of. You can do this by paying a modest fee to a company like ‘Check My Credit File’ (https://www.mycreditfile.com.au). It’s not out of the ordinary for mistakes to be made on credit reports which can have a detrimental influence on your financial capabilities. Read your credit report thoroughly and challenge any mistakes that you find to make sure your credit report accurately emulates your financial history. Some common oversights that can occur are:
If you uncover any oversights, advise the credit reporting agency in writing so these listings can be adjusted or removed to mirror your true credit history.
Pay your bills on time
Individuals underestimate how vital 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 to all your creditors and ask them to automatically debit your bank account every month. Often, your creditors would be more than happy to do this as delivering paper statements is time-consuming and costly. By placing all your bills on autopilot, you can be certain 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 certain details throughout your credit report which lenders will view positively. For instance, if you are married, have been employed by the same company for more than two years, or you are a homeowner, then this information will enhance your credit report. Lenders generally view this information in a positive light and it can help you in future credit applications. If you uncover that this type of information is missing from your credit report, inform the credit reporting agency and ask that it be provided.
Keep away from too many credit applications
Each time you make an application for 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 essential that you are sensible and selective when applying for credit and only apply when you are confident it will be accepted. Additionally, if you recently had a credit application denied, wait a decent amount of time before applying again.
Look into a debt consolidation loan
Generally, it can be very problematic 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 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, contact our friendly team at Bankruptcy Experts Penrith on 1300 795 575, or alternatively visit our website for more information: www.bankruptcyexpertspenrith.com.au