Best Ways to Repair a Poor Credit Report
Whether we acknowledge it or not, our credit report has a considerable effect on our lives. It’s kind of like our health; we don’t treasure good health until we lose it. Most people don’t even find out they have a poor credit report until they make an application for a personal line of credit and it’s disapproved. It can come as quite a surprise to some, considering that even one missed payment that is documented by your financial institution can remain on your credit report for up to 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 times, credit reports have been redesigned to place greater importance on favourable history such as paying your bills on time, but overwhelmingly, credit reports are used by financial institutions to examine your capability to repay debts by assessing your past behaviour.
When lenders 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. Although finding solutions to repair a poor credit report can be tough, there are a number of things you can do to strengthen it. The good news is, we’ve assembled a list of ideas that you can try to boost your credit report and your general financial health.
Review your credit report for any errors
The first step is to examine your credit report to find out exactly what it features. 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 rare for oversights to be made on credit reports which can have a damaging impact on your financial capabilities. Read your credit report meticulously and challenge any errors that you find to make sure your credit report appropriately mirrors your financial history. Some common mistakes that can occur are:
- Mistakes in personal details
- Wrongful defaults and judgements
- Old defaults and judgements
- Inaccurate information regarding your credit history
If you discover any errors, advise 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. Sometimes, individuals can be forgetful considering that they have too many bills to pay, so it’s a smart idea to contact 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 delivering paper statements is time-consuming and expensive. By placing all your bills on autopilot, you can be certain that they’ll be paid in full and on time, which will have a positive effect on your credit report
Add extra information to your credit report
There are specific details throughout your credit report which creditors will view favourably. For instance, if you are married, have been employed by the same employer for more than two years, or you are a homeowner, then this information will improve your credit report. Creditors normally view this information in a positive light and it can assist in future credit applications. If you see that this sort of information is missing from your credit report, notify the credit reporting agency and ask that it be included.
Avoid too many credit applications
Each time you make an application for a line of credit, it is mentioned on your credit report. Naturally, excessive applications for credit will have an adverse effect on your credit report and the way in which lenders view your financial behaviours. It is vital that you are prudent and selective when applying for credit and only apply when you are optimistic it will be approved. Also, if you recently had a credit application rejected, wait a decent amount of time before applying again.
Take into consideration a debt consolidation loan
Generally, it can be very difficult to control your debts when then you have lots of them. Neglecting just one debt repayment can become a default, which will stay on your credit report for a minimum of five years. Look into 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 impact on your credit report. If you’re interested in a debt consolidation loan, get in contact with our friendly team at Bankruptcy Experts Bunbury on 1300 795 575, or alternatively visit our website for further information: www.bankruptcyexpertsbunbury.com.au