Best Ways to Improve a Bad Credit Report
Whether we understand it or not, our credit report has a significant impact on our lives. It’s sort of like our health; we don’t appreciate good health until we lose it. Most people don’t even learn that they have a bad credit report until they apply 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 disclosed 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 document that points out information about your financial history with financial institutions. In recent times, credit reports have been revamped to place greater emphasis on constructive history such as paying your bills on time, but overwhelmingly, credit reports are used by financial institutions to check your capability to repay debts by assessing your past behaviour.
When financial institutions check your credit report, you generally either get a pass or fail so any default irrespective of its severity can have a long-lasting influence on your financial opportunities for years to come. Even though finding solutions to enhance a bad credit report can be difficult, there are specific things you can do to strengthen it. The good news is, we’ve gathered a list of suggestions that you can try to improve your credit report and your general financial health.
Inspect your credit report for any errors
The first step is to check your credit report to discover 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 uncommon for oversights to be made on credit reports which can have a negative influence on your financial capabilities. Read your credit report thoroughly and challenge any mistakes that you find to make sure your credit report appropriately mirrors your financial history. Some general errors that can occur are:
- Errors in personal information
- Wrongful defaults and judgements
- Old defaults and judgements
- Inaccurate information concerning your credit history
If you discover any mistakes, inform the credit reporting agency in writing so these listings can be adjusted or removed to reflect your true credit history.
Pay your bills on time
Individuals 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 contact all your lenders and ask them to automatically debit your bank account every month. Normally, your creditors 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 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 favourably. As an example, if you are married, have been working for the same workplace for more than two years, or you are a property owner, then this information will enhance your credit report. Creditors commonly view this information in a positive light and it can help you in future credit applications. If you discover that this kind of information is missing from your credit report, advise the credit reporting agency and request that it be added.
Keep away from too many credit applications
Each time you make an application for a line of credit, it is noted on your credit report. Evidently, too many applications for credit will have an unfavorable impact on your credit report and the way in which lenders view your financial behaviours. It is paramount that you are reasonable and selective when requesting credit and only apply when you are optimistic it will be accepted. Furthermore, if you recently had a credit application declined, wait a decent amount of time before applying again.
Look at a debt consolidation loan
Naturally, it can be very challenging to manage your debts when then you have lots of them. Neglecting 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. Normally, 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, speak to our friendly team at Bankruptcy Experts Australia on 1300 795 575, or alternatively visit our website for further information: Bankruptcy Australia