Whether we understand it or not, our credit report has a substantial impact on our lives. It’s sort of like our health; we don’t appreciate good health until we lose it. Many individuals don’t even find out they have a poor credit report until they apply for a line of credit and it’s disapproved. It can come as quite a shock to some, simply because even one overlooked payment that is documented by your lender can remain on your credit report for up to seven years.
So, what is a credit report? A credit report is a document that specifies details about your financial history with lenders. Recently, credit reports have been redesigned to place greater attention on favourable 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 normally either get a pass or fail so any default regardless of its severity can have a long-lasting impact on your financial possibilities for years to follow. Whilst finding solutions to boost a bad credit report can be challenging, there are particular 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 general financial health.
Review your credit report for any mistakes
The first step is to review your credit report to uncover exactly what it contains. 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 uncommon for mistakes to be made on credit reports which can have a detrimental effect on your financial abilities. Read your credit report thoroughly and dispute any oversights that you discover to make sure your credit report accurately emulates your financial history. Some standard oversights that can occur are:
- Errors in personal information
- Wrongful defaults and judgements
- Old defaults and judgements
- Incorrect information regarding your credit history
If you unveil any errors, inform the credit reporting agency in writing so these listings can be modified or removed to mirror your true credit history.
Pay your bills on time
People underestimate how important it is to pay your bills on time. Sometimes, people can be forgetful considering that they have too many bills to pay, so it’s a wise idea to contact all your creditors and ask them to automatically debit your bank account every month. Normally, your creditors would be more than happy to do this as sending paper statements is time-consuming and costly. By placing all your bills on autopilot, you can be sure 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 lenders will view favourably. As an example, if you are married, have been employed by the same employer for more than two years, or you are a homeowner, then this information will boost your credit report. Lenders usually view this information in a positive light and it can help you in future credit applications. If you find that this kind of information is missing from your credit report, advise the credit reporting agency and ask that it be added.
Keep away from too many credit applications
Each time you apply for a line of credit, it is noted on your credit report. Obviously, excessive applications for credit will have an unfavorable impact on your credit report and the way in which lenders view your financial behaviours. It is paramount that you are shrewd and selective when applying for credit and only apply when you are optimistic it will be approved. Moreover, if you recently had a credit application denied, wait a decent amount of time before applying again.
Look at a debt consolidation loan
Naturally, it can be very tricky to control your debts when then you have lots of them. Forgetting just one debt repayment can become a default, which will remain on your credit report for at least five years. Consider 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, talk to our friendly team at Bankruptcy Experts Dubbo on 1300 795 575, or alternatively visit our website for more information: www.bankruptcyexpertsdubbo.com.au