Whether we acknowledge it or not, our credit report has a significant influence 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 know 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 bombshell to some, since even one overlooked payment that is reported by your creditor can remain 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 lenders. In recent years, credit reports have been redesigned to place greater importance on favourable history like paying your bills on time, but overwhelmingly, credit reports are used by creditors to calculate your capability to repay debts by assessing your past behaviour.
When financial institutions inspect your credit report, you normally either get a pass or fail so any default irrespective of its severity can have a long-lasting effect on your financial opportunities for years to come. While finding solutions to improve a poor credit report can be tricky, there are specific things you can do to enhance it. Fortunately, we’ve assembled a list of suggestions that you can try to enhance your credit report and your general financial health.
Inspect your credit report for any mistakes
The first step is to examine your credit report to find out exactly what it comprises of. 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 oversights to be made on credit reports which can have a harmful impact on your financial capabilities. Read your credit report extensively and dispute any mistakes that you find to ensure your credit report appropriately reflects your financial history. Some general oversights that can occur are:
- Mistakes in personal information
- Wrongful defaults and judgements
- Old defaults and judgements
- Inaccurate information relating to your credit history
If you find any errors, inform the credit reporting agency in writing so these listings can be adjusted or removed to emulate your true credit history.
Pay your bills on time
People underestimate how valuable it is to pay your bills on time. Occasionally, people 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 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 certain 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 certain details within your credit report which lenders will view positively. For example, if you are married, have been employed by the same workplace for more than two years, or you are a homeowner, then this information will improve your credit report. Lenders commonly view this information in a positive light and it can assist in future credit applications. If you find that this sort of information is missing from your credit report, alert the credit reporting agency and ask that it be included.
Steer clear of too many credit applications
Each time you make an application for a line of credit, it is documented on your credit report. Evidently, excessive applications for credit will have a damaging impact on your credit report and the way in which lenders view your financial behaviours. It is crucial that you are vigilant and selective when applying for credit and only apply when you are optimistic it will be accepted. Likewise, if you recently had a credit application turned down, wait a decent amount of time before applying again.
Look at a debt consolidation loan
Generally, it can be very tricky to control your debts when then you have lots of them. Forgetting just one debt repayment can become a default, which will remain on your credit report for at least five years. Consider 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 Hervey Bay on 1300 795 575, or alternatively visit our website for additional information: www.bankruptcyexpertsherveybay.com.au