Best Ways to Improve a Poor Credit Report
Regardless if we realise it or not, our credit report has a considerable 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 surprise to some, given that even one missed payment that is disclosed by your lender can stay on your credit report for a maximum of seven years.
So, what is a credit report? A credit report is a report that specifies information about your financial history with creditors. In recent years, credit reports have been overhauled to place greater emphasis on favourable history such as paying your bills on time, but overwhelmingly, credit reports are used by financial institutions to calculate 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 regardless of its severity can have a long-lasting effect on your financial prospects for years to follow. While finding solutions to repair a poor credit report can be complicated, there are a number of things you can do to improve it. The good news is, we’ve compiled a list of recommendations that you can try to improve your credit report and your general financial health.
Inspect your credit report for any mistakes
The first step is to inspect your credit report to uncover exactly what it consists of. You can do this by paying a small fee to a firm like ‘Check My Credit File’ (https://www.mycreditfile.com.au). It’s not unusual for errors to be made on credit reports which can have a harmful impact on your financial capabilities. Read your credit report thoroughly and challenge any mistakes that you discover to make sure your credit report accurately mirrors your financial history. Some standard errors 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 mistakes, notify 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 vital it is to pay your bills on time. Sometimes, individuals can be forgetful considering that they have too many bills to pay, so it’s an intelligent idea to speak with 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 delivering 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 effect on your credit report
Add extra information to your credit report
There are particular details within your credit report which creditors will view favourably. As an example, if you are married, have been working with the same employer for more than two years, or you are a homeowner, then this information will improve your credit report. Creditors normally view this information in a positive light and it can assist 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.
Keep away from excessive credit applications
Each time you apply for a line of credit, it is documented on your credit report. Evidently, too many applications for credit will have a negative effect on your credit report and the way in which lenders view your financial behaviours. It is essential that you are sensible and selective when requesting credit and only apply when you are optimistic it will be accepted. Moreover, if you recently had a credit application denied, wait a respectable amount of time before applying again.
Contemplate a debt consolidation loan
Certainly, it can be very difficult to oversee your debts when then you have lots of them. Overlooking just one debt repayment can become a default, which will remain 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. Commonly, 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 with our friendly team at Bankruptcy Experts Wollongong on 1300 795 575, or alternatively visit our website for further information: www.bankruptcyexpertswollongong.com.au