Whether we understand it or not, our credit report has a notable impact on our lives. It’s kind of like our health; we don’t appreciate good health until we lose it. Most individuals don’t even learn that they have a poor credit report until they make an application for a line of credit and it’s disapproved. It can come as quite a bombshell to some, since even one missed 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 stipulates information about your financial history with creditors. Recently, credit reports have been remodelled to place greater attention on favourable history like paying your bills on time, but overwhelmingly, credit reports are used by lenders to check your capability to repay debts by assessing your past behaviour.
When financial institutions review your credit report, you usually either get a pass or fail so any default irrespective of its severity can have a long-lasting effect on your financial possibilities for years to follow. Even though finding solutions to improve a bad credit report can be complicated, there are certain things you can do to strengthen it. The good news is, we’ve gathered a list of suggestions that you can try to boost 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 learn exactly what it comprises 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 mistakes to be made on credit reports which can have an undesirable effect on your financial capabilities. Read your credit report thoroughly and challenge any errors that you discover to make sure your credit report appropriately reflects your financial history. Some typical mistakes that can occur are:
- Mistakes in personal details
- Wrongful defaults and judgements
- Old defaults and judgements
- Inaccurate information relating to your credit history
If you unmask any oversights, 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
Individuals underestimate how critical it is to pay your bills on time. Occasionally, individuals can be forgetful considering that they have too many bills to pay, so it’s a smart idea to call all your lenders and ask them to automatically debit your bank account each month. Usually, your creditors would be more than happy to do this as sending paper statements is time-consuming and costly. By putting 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 specific details throughout your credit report which creditors will view favourably. As an example, 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 enhance your credit report. Creditors typically view this information in a positive light and it can help you in future credit applications. If you uncover that this sort of information is missing from your credit report, notify the credit reporting agency and request that it be included.
Steer clear of excessive credit applications
Each time you apply for a line of credit, it is recorded on your credit report. Evidently, too many applications for credit will have a detrimental effect on your credit report and the way in which creditors view your financial behaviours. It’s important that you are prudent and selective when requesting credit and only apply when you are confident it will be accepted. Likewise, if you recently had a credit application declined, wait a respectable amount of time before applying again.
Consider a debt consolidation loan
Generally, it can be very tough 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. Look into a single debt consolidation loan which will accumulate all your debts into one, single, monthly repayment. Typically, 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, talk with our friendly team at Bankruptcy Experts Rockhampton on 1300 795 575, or alternatively visit our website for additional information: www.bankruptcyexpertsrockhampton.com.au