Whether we understand it or not, our credit report has a notable effect on our lives. It’s kind of like our health; we don’t cherish good health until we lose it. Many individuals don’t even find out 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 bombshell to some, considering that even one missed payment that is reported by your creditor can stay on your credit report for a maximum of seven years.
So, what is a credit report? A credit report is a record that stipulates information about your financial history with creditors. In recent times, credit reports have been overhauled to place greater emphasis on constructive history like paying your bills on time, but overwhelmingly, credit reports are used by creditors to calculate your ability to repay debts by assessing your past behaviour.
When creditors review your credit report, you usually 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. Although finding solutions to improve a bad credit report can be tricky, there are certain things you can do to boost it. Fortunately, we’ve put together a list of suggestions that you can try to enhance your credit report and your overall financial health.
Review your credit report for any mistakes
The first step is to check your credit report to discover exactly what it consists of. You can do this by paying a modest fee to an agency 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 harmful influence on your financial abilities. Read your credit report meticulously and challenge any mistakes that you find to ensure your credit report appropriately emulates your financial history. Some typical mistakes that can occur are:
- Errors in personal details
- Wrongful defaults and judgements
- Old defaults and judgements
- Incorrect information regarding your credit history
If you unveil any errors, alert the credit reporting agency in writing so these listings can be altered or removed to reflect your true credit history.
Pay your bills on time
Lots of people underestimate how valuable 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 an intelligent idea to call all your lenders and ask them to automatically debit your bank account each month. Usually, your lenders would be more than happy to do this as sending paper invoices is time-consuming and costly. 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 effect on your credit report
Add additional 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 employer for over two years, or you are a homeowner, then this information will boost your credit report. Lenders generally view this information in a positive light and it can help you in future credit applications. If you find that this type of information is missing from your credit report, advise the credit reporting agency and request that it be provided.
Steer clear of too many credit applications
Each time you make an application for a line of credit, it is documented on your credit report. Evidently, excessive applications for credit will have a detrimental impact on your credit report and the way in which creditors view your financial behaviours. It is crucial that you are vigilant and selective when making an application for credit and only apply when you are confident it will be approved. Furthermore, if you recently had a credit application denied, wait a respectable amount of time before applying again.
Look at a debt consolidation loan
Naturally, it can be very problematic to control your debts when then you have lots of them. Forgetting just one debt repayment can turn into a default, which will remain on your credit report for at least five years. Think about 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 impact on your credit report. If you’re interested in a debt consolidation loan, contact our friendly team at Bankruptcy Experts Tennant Creek on 1300 795 575, or alternatively visit our website for further information: Bankruptcy Tennant Creek