Best Ways to Improve a Bad Credit Report
Regardless if we realise it or not, our credit report has a meaningful effect on our lives. It’s kind of like our health; we don’t appreciate good health until we lose it. Lot of people don’t even learn that they have a poor credit report until they make an application for a personal line of credit and it’s disapproved. It can come as quite a surprise to some, given that even one overlooked payment that is documented by your financial institution can remain on your credit report for a maximum of seven years.
So, what is a credit report? A credit report is a record that points out details about your financial history with lenders. In recent times, credit reports have been redesigned to place greater attention on constructive history such as paying your bills on time, but overwhelmingly, credit reports are used by financial institutions to analyse your ability to repay debts by assessing your past behaviour.
When lenders check 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 come. Although finding solutions to improve a poor credit report can be complicated, there are various things you can do to improve it. Fortunately, we’ve gathered a list of recommendations that you can try to enhance your credit report and your general financial health.
Check your credit report for any mistakes
The first step is to check your credit report to find out exactly what it consists of. You can do this by paying a small fee to an agency like ‘Check My Credit File’ (https://www.mycreditfile.com.au). It’s not unusual for mistakes to be made on credit reports which can have an adverse effect on your financial abilities. Read your credit report thoroughly and dispute any errors that you discover to ensure your credit report accurately reflects your financial history. Some standard errors that can occur are:
- Mistakes in personal information
- Wrongful defaults and judgements
- Old defaults and judgements
- Incorrect information concerning your credit history
If you uncover any oversights, inform the credit reporting agency in writing so these listings can be adjusted or removed to reflect your true credit history.
Pay your bills on time
Lots of people underestimate how critical 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 talk to all your creditors and ask them to automatically debit your bank account each month. Ordinarily, your creditors would be more than happy to do this as sending paper statements is time-consuming and expensive. 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 impact on your credit report
Add extra information to your credit report
There are a number of details throughout your credit report which lenders will view favourably. For instance, if you are married, have been working for the same workplace for more than two years, or you are a property owner, then this information will improve your credit report. Lenders generally view this information in a positive light and it can assist in future credit applications. If you see that this kind of information is missing from your credit report, alert the credit reporting agency and request that it be added.
Steer clear of too many credit applications
Each time you apply for a line of credit, it is documented on your credit report. Clearly, excessive applications for credit will have an unfavorable impact on your credit report and the way in which creditors view your financial behaviours. It is imperative that you are sensible and selective when applying for credit and only apply when you are confident it will be accepted. At the same time, if you recently had a credit application denied, wait a decent amount of time before applying again.
Contemplate a debt consolidation loan
Certainly, it can be very difficult to control 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. Consider 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, get in contact with our friendly team at Bankruptcy Experts Joondalup on 1300 795 575, or alternatively visit our website for additional information: www.bankruptcyexpertsjoondalup.com.au