Whether we understand it or not, our credit report has a considerable impact on our lives. It’s kind of like our health; we don’t cherish good health until we lose it. Most individuals don’t even find out they have a bad credit report until they apply for a personal line of credit and it’s rejected. It can come as quite a surprise to some, simply because even one overlooked payment that is disclosed by your lender can stay on your credit report for as much as seven years.
So, what is a credit report? A credit report is a report that stipulates information about your financial history with lenders. In recent times, credit reports have been revamped to place greater focus on favourable history like paying your bills on time, but overwhelmingly, credit reports are used by creditors to examine your capability to repay debts by assessing your past behaviour.
When creditors check your credit report, you commonly either get a pass or fail so any default irrespective of its severity can have a long-lasting effect on your financial prospects for years to come. Even though finding solutions to enhance a poor credit report can be tough, there are specific things you can do to enhance it. Fortunately, we’ve assembled a list of ideas that you can try to strengthen 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 find exactly what it contains. 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 errors to be made on credit reports which can have a harmful impact on your financial abilities. Read your credit report extensively and challenge any mistakes that you find to make sure your credit report accurately emulates your financial history. Some general oversights that can occur are:
- Errors in personal details
- Wrongful defaults and judgements
- Old defaults and judgements
- Incorrect information concerning your credit history
If you find any oversights, notify the credit reporting agency in writing so these listings can be modified or removed to emulate your true credit history.
Pay your bills on time
Individuals underestimate how crucial it is to pay your bills on time. Sometimes, people can be forgetful simply because they have too many bills to pay, so it’s a smart idea to call all your creditors and ask them to automatically debit your bank account every month. Ordinarily, your lenders would be more than happy to do this as delivering paper invoices is time-consuming and costly. By placing all your bills on autopilot, you can be sure that they’ll be paid in full and on time, which will have a positive effect on your credit report
Add additional information to your credit report
There are specific details throughout your credit report which lenders will view positively. As an example, if you are married, have been working for the same company for over two years, or you are a homeowner, then this information will boost your credit report. Creditors usually view this information in a positive light and it can help you in future credit applications. If you uncover that this type 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
Every time you apply for a line of credit, it is mentioned on your credit report. Clearly, excessive applications for credit will have a harmful effect on your credit report and the way in which lenders view your financial behaviours. It is essential that you are shrewd and selective when applying for credit and only apply when you are confident it will be approved. Likewise, if you recently had a credit application rejected, wait a respectable amount of time before applying again.
Consider a debt consolidation loan
Of course, it can be very challenging to manage 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 a minimum of 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 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 to our friendly team at Bankruptcy Experts Gosford on 1300 795 575, or alternatively visit our website for more information: www.bankruptcyexpertsgosford.com.au