Whether we realise it or not, our credit report has a substantial impact on our lives. It’s sort of like our health; we don’t treasure good health until we lose it. Many people don’t even realise they have a bad credit report until they make an application for a line of credit and it’s rejected. It can come as quite a bombshell to some, simply because even one overlooked payment that is documented by your financial institution can stay on your credit report for as much as seven years.
So, what is a credit report? A credit report is a document that specifies details about your financial history with lenders. Recently, credit reports have been overhauled to place greater attention on favourable history like paying your bills on time, but overwhelmingly, credit reports are used by financial institutions to evaluate your ability to repay debts by assessing your past behaviour.
When lenders check your credit report, you typically either get a pass or fail so any default regardless of its severity can have a long-lasting effect on your financial prospects for years to come. While finding solutions to boost a bad credit report can be complicated, there are specific things you can do to boost it. Fortunately, we’ve compiled a list of ideas that you can try to strengthen your credit report and your general financial health.
Check your credit report for any oversights
The first step is to check your credit report to find out exactly what it contains. You can do this by paying a modest fee to a business like ‘Check My Credit File’ (https://www.mycreditfile.com.au). It’s not out of the ordinary for errors to be made on credit reports which can have a damaging influence on your financial abilities. Read your credit report carefully and dispute any mistakes that you find to make sure your credit report accurately emulates your financial history. Some general errors that can occur are:
- Errors in personal details
- Wrongful defaults and judgements
- Old defaults and judgements
- Incorrect information concerning your credit history
If you uncover any oversights, alert the credit reporting agency in writing so these listings can be altered or removed to mirror your true credit history.
Pay your bills on time
People underestimate how crucial 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 call all your creditors and ask them to automatically debit your bank account every month. Normally, your lenders would be more than happy to do this as sending paper statements is time-consuming and costly. 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 impact 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 for the same company for more than two years, or you are a property owner, then this information will improve your credit report. Lenders normally view this information in a positive light and it can assist in future credit applications. If you discover 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 too many credit applications
Each time you make an application for a line of credit, it is recorded on your credit report. Obviously, excessive applications for credit will have an unfavorable impact on your credit report and the way in which creditors view your financial behaviours. It is crucial that you are shrewd and selective when requesting credit and only apply when you are optimistic it will be approved. Also, if you recently had a credit application turned down, wait a decent amount of time before applying again.
Look into 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 turn into a default, which will stay 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. Normally, 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, contact our friendly team at Gold Coast Bankruptcy Centre on 1300 795 575, or alternatively visit our website for additional information: www.goldcoastbankruptcycentre.com.au