Best Ways to Improve a Poor Credit Report
Whether we acknowledge it or not, our credit report has a serious effect on our lives. It’s sort of like our health; we don’t cherish good health until we lose it. Most individuals don’t even know they have a poor credit report until they apply for a personal line of credit and it’s disapproved. It can come as quite a shock to some, considering that even one missed payment that is documented by your lender can stay on your credit report for up to seven years.
So, what is a credit report? A credit report is a record that stipulates information about your financial history with lenders. In recent times, credit reports have been overhauled to place greater attention on constructive history such as paying your bills on time, but overwhelmingly, credit reports are used by lenders to examine your ability to repay debts by assessing your past behaviour.
When creditors review your credit report, you generally 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. Whilst finding solutions to enhance a bad credit report can be difficult, there are various things you can do to boost it. Fortunately, we’ve gathered a list of suggestions that you can try to boost your credit report and your overall financial health.
Examine your credit report for any errors
The first step is to review your credit report to discover 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 out of the ordinary for mistakes to be made on credit reports which can have a negative impact on your financial abilities. Read your credit report carefully and dispute any oversights that you discover to ensure your credit report appropriately reflects your financial history. Some typical errors that can occur are:
- Errors in personal details
- Wrongful defaults and judgements
- Old defaults and judgements
- Inaccurate information relating to your credit history
If you unmask any mistakes, advise the credit reporting agency in writing so these listings can be altered or removed to emulate your true credit history.
Pay your bills on time
People underestimate how critical it is to pay your bills on time. In some cases, people can be forgetful considering that they have too many bills to pay, so it’s a smart idea to speak to all your lenders and ask them to automatically debit your bank account each month. Ordinarily, your lenders would be more than happy to do this as posting paper invoices is time-consuming and costly. By putting all your bills on autopilot, you can be certain that they’ll be paid on time and in full, which will have a positive effect on your credit report
Add additional information to your credit report
There are certain 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 property owner, then this information will improve your credit report. Lenders typically view this information in a positive light and it can assist in future credit applications. If you uncover 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 noted on your credit report. Clearly, excessive applications for credit will have an adverse impact on your credit report and the way in which lenders view your financial behaviours. It is very important that you are reasonable and selective when making an application for credit and only apply when you are confident it will be accepted. At the same time, if you recently had a credit application turned down, wait a respectable amount of time before applying again.
Take into consideration a debt consolidation loan
Certainly, it can be very complicated 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 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, speak to our friendly team at Bankruptcy Experts Tablelands on 1300 795 575, or alternatively visit our website for additional information: www.bankruptcyexpertstablelands.com.au