Best Ways to Improve a Poor Credit Report

Whether we realise it or not, our credit report has a significant effect on our lives. It’s kind of like our health; we don’t appreciate good health until we lose it. Many people don’t even find out they have a bad credit report until they make an application for a line of credit and it’s disapproved. It can come as quite a surprise to some, given that even one missed payment that is reported by your creditor can remain on your credit report for as much as seven years.

So, what is a credit report? A credit report is a record that points out information about your financial history with lenders. In recent years, credit reports have been remodelled to place greater importance on favourable history such as paying your bills on time, but overwhelmingly, credit reports are used by lenders to examine your capability to repay debts by assessing your past behaviour.

When lenders check your credit report, you commonly 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. Even though finding solutions to repair a poor credit report can be tricky, there are a number of things you can do to enhance it. Luckily, we’ve assembled a list of suggestions that you can try to boost your credit report and your overall financial health.

Examine your credit report for any mistakes

The first step is to review your credit report to find exactly what it features. You can do this by paying a small fee to a business like ‘Check My Credit File’ (https://www.mycreditfile.com.au). It’s not rare for mistakes to be made on credit reports which can have a harmful effect on your financial abilities. Read your credit report thoroughly and challenge any oversights that you find to make sure your credit report appropriately mirrors your financial history. Some general mistakes that can occur are:

  •  Errors in personal details
  •  Wrongful defaults and judgements
  •  Old defaults and judgements
  •  Incorrect information regarding your credit history

If you unveil any mistakes, advise the credit reporting agency in writing so these listings can be amended or removed to emulate your true credit history.

Pay your bills on time

People underestimate how significant 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 a wise idea to speak to all your creditors and ask them to automatically debit your bank account every month. Ordinarily, your lenders would be more than happy to do this as posting paper invoices 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 additional information to your credit report

There are particular details within your credit report which creditors will view positively. As an example, if you are married, have been working for the same employer for over two years, or you are a homeowner, then this information will strengthen your credit report. Lenders generally view this information in a positive light and it can assist in future credit applications. If you see that this type of information is missing from your credit report, alert the credit reporting agency and ask that it be provided.

Avoid excessive credit applications

Every time you make an application for a line of credit, it is documented on your credit report. Obviously, too many applications for credit will have a damaging impact on your credit report and the way in which lenders view your financial behaviours. It is imperative that you are vigilant and selective when requesting credit and only apply when you are confident it will be approved. Also, if you recently had a credit application rejected, wait a decent amount of time before applying again.

Look into a debt consolidation loan

Generally, it can be very tough to manage 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. Take into consideration a single debt consolidation loan which will accumulate all your debts into one, single, monthly repayment. Typically, interest rates on debt consolidation loans are quite 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, call our friendly team at Bankruptcy Experts Sydney on 1300 795 575, or alternatively visit our website for additional information: www.bankruptcyexpertssydney.com.au