Regardless if 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 cherish good health until we lose it. Lots of people don’t even learn that they have a bad credit report until they apply for a line of credit and it’s rejected. It can come as quite a shock to some, since even one overlooked payment that is reported 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 report that specifies information about your financial history with financial institutions. In recent years, credit reports have been remodelled to place greater attention on constructive history like paying your bills on time, but overwhelmingly, credit reports are used by creditors to gauge 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 effect on your financial opportunities for years to come. Although finding solutions to boost a poor credit report can be challenging, there are particular things you can do to boost it. The good news is, we’ve assembled a list of recommendations that you can try to strengthen your credit report and your overall financial health.
Inspect your credit report for any mistakes
The first step is to inspect your credit report to discover exactly what it contains. You can do this by paying a small fee to a company like ‘Check My Credit File’ (https://www.mycreditfile.com.au). It’s not uncommon for errors to be made on credit reports which can have a detrimental effect on your financial capabilities. Read your credit report thoroughly and dispute any errors that you discover to make sure your credit report appropriately emulates your financial history. Some common mistakes that can occur are:
- Errors in personal details
- Wrongful defaults and judgements
- Old defaults and judgements
- Incorrect information relating to your credit history
If you uncover any mistakes, inform the credit reporting agency in writing so these listings can be modified 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. Sometimes, individuals can be forgetful considering that they have too many bills to pay, so it’s an intelligent idea to talk to all your lenders and ask them to automatically debit your bank account every month. Usually, your lenders would be more than happy to do this as posting paper statements is time-consuming and expensive. By putting 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 additional information to your credit report
There are specific details within your credit report which creditors will view positively. As an example, if you are married, have been working with the same company for more than two years, or you are a property owner, then this information will strengthen your credit report. Lenders generally view this information in a positive light and it can help you 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 added.
Avoid too many credit applications
Every time you request a line of credit, it is recorded on your credit report. Obviously, too many applications for credit will have a harmful effect on your credit report and the way in which lenders view your financial behaviours. It is very important that you are sensible and selective when making an application for credit and only apply when you are optimistic it will be accepted. At the same time, if you recently had a credit application declined, wait a decent amount of time before applying again.
Take into consideration a debt consolidation loan
Certainly, it can be very tough to manage your debts when then you have lots of them. Forgetting just one debt repayment can become a default, which will stay on your credit report for at least five years. Take into consideration a single debt consolidation loan which will accumulate all your debts into one, single, monthly repayment. Commonly, 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, speak to our friendly team at Bankruptcy Experts Rockingham on 1300 795 575, or alternatively visit our website for additional information: www.bankruptcyexpertsrockingham.com.au