Best Ways to Repair a Bad Credit Report

06
June
2018

Whether we realise it or not, our credit report has a notable influence on our lives. It’s sort of like our health; we don’t cherish good health until we lose it. Many individuals don’t even learn that they have a poor credit report until they apply for a line of credit and it’s disapproved. It can come as quite a surprise to some, considering that even one missed payment that is disclosed by your lender can remain on your credit report for as much as seven years.

So, what is a credit report? A credit report is a report that stipulates details about your financial history with financial institutions. In recent years, credit reports have been redesigned to place greater attention on favourable history such as paying your bills on time, but overwhelmingly, credit reports are used by lenders to calculate your ability to repay debts by assessing your past behaviour.

When creditors review your credit report, you normally either get a pass or fail so any default irrespective of its severity can have a long-lasting influence on your financial possibilities for years to follow. Whilst finding solutions to boost a bad credit report can be difficult, there are various things you can do to improve it. Fortunately, we’ve put together a list of recommendations that you can try to enhance your credit report and your general financial health.

Inspect your credit report for any mistakes

The first step is to review your credit report to discover exactly what it features. You can do this by paying a small fee to a firm 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 detrimental effect on your financial abilities. Read your credit report extensively and dispute any mistakes that you discover to ensure your credit report appropriately emulates your financial history. Some general oversights that can occur are:

  •  Errors in personal information
  •  Wrongful defaults and judgements
  •  Old defaults and judgements
  •  Inaccurate information concerning your credit history

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

Pay your bills on time

Lots of people underestimate how significant it is to pay your bills on time. Occasionally, individuals can be forgetful considering that they have too many bills to pay, so it’s an intelligent idea to speak with 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 delivering paper statements 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 impact on your credit report

Add additional information to your credit report

There are a number of details within your credit report which lenders will view favourably. As an example, if you are married, have been employed by the same company for more than two years, or you are a property owner, then this information will enhance your credit report. Creditors normally view this information in a positive light and it can assist in future credit applications. If you discover that this kind of information is missing from your credit report, notify the credit reporting agency and ask that it be added.

Avoid too many credit applications

Every time you apply for a line of credit, it is recorded on your credit report. Obviously, too many applications for credit will have a negative effect on your credit report and the way in which lenders view your financial behaviours. It is paramount that you are prudent and selective when applying for credit and only apply when you are optimistic it will be approved. Likewise, if you recently had a credit application rejected, wait a decent amount of time before applying again.

Look into a debt consolidation loan

Certainly, it can be very problematic to control your debts when then you have lots of them. Overlooking just one debt repayment can become a default, which will stay on your credit report for a minimum of five years. Think about a single debt consolidation loan which will accumulate all your debts into one, single, monthly repayment. Usually, 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 Toowoomba on 1300 795 575, or alternatively visit our website for further information: www.bankruptcyexpertstoowoomba.com.au

 

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