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 treasure good health until we lose it. Most people don’t even learn that they have a poor credit report until they make an application for a line of credit and it’s rejected. It can come as quite a shock to some, since even one missed payment that is disclosed 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 document that stipulates information about your financial history with creditors. Recently, credit reports have been remodelled to place greater attention on constructive history such as paying your bills on time, but overwhelmingly, credit reports are used by financial institutions to check your ability to repay debts by assessing your past behaviour.
When financial institutions check your credit report, you generally either get a pass or fail so any default irrespective of its severity can have a long-lasting impact on your financial opportunities for years to come. Even though finding solutions to enhance a bad credit report can be challenging, there are various things you can do to improve it. Fortunately, we’ve put together a list of ideas that you can try to improve your credit report and your overall financial health.
Review your credit report for any oversights
The first step is to inspect your credit report to discover exactly what it consists of. You can do this by paying a small fee to a business like ‘Check My Credit File’ (https://www.mycreditfile.com.au). It’s not uncommon for oversights to be made on credit reports which can have a harmful effect on your financial capabilities. Read your credit report meticulously and challenge any mistakes that you discover to make sure your credit report accurately reflects your financial history. Some common mistakes that can occur are:
- Mistakes in personal information
- Wrongful defaults and judgements
- Old defaults and judgements
- Incorrect information relating to your credit history
If you uncover any oversights, 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
Individuals underestimate how important it is to pay your bills on time. Occasionally, people can be forgetful simply because they have too many bills to pay, so it’s a smart idea to speak to all your creditors and ask them to automatically debit your bank account each month. Generally, your creditors would be more than happy to do this as delivering paper statements is time-consuming and expensive. 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 impact on your credit report
Add extra information to your credit report
There are a number of details throughout your credit report which creditors will view positively. For instance, if you are married, have been employed by the same company for more than two years, or you are a property owner, then this information will boost your credit report. Creditors usually 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, inform the credit reporting agency and ask that it be provided.
Keep away from too many credit applications
Each time you request a line of credit, it is mentioned on your credit report. Evidently, too many applications for credit will have a negative impact on your credit report and the way in which lenders view your financial behaviours. It is imperative that you are shrewd and selective when making an application for credit and only apply when you are optimistic it will be approved. Additionally, if you recently had a credit application declined, wait a respectable amount of time before applying again.
Look into a debt consolidation loan
Of course, it can be very complicated to oversee your debts when then you have lots of them. Neglecting just one debt repayment can turn into a default, which will stay on your credit report for a minimum of five years. Consider a single debt consolidation loan which will accumulate all your debts into one, single, monthly repayment. Usually, 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, reach out to our friendly team at Bankruptcy Wagga Wagga on 1300 818 575, or alternatively visit our website for further information: http://www.bankruptcy-waggawagga.com.au/