Best Ways to Improve a Bad Credit Report

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Regardless if we acknowledge it or not, our credit report has a notable influence 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 know they have a bad credit report until they make an application for a personal 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 creditor 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 information about your financial history with creditors. In recent times, credit reports have been overhauled to place greater importance on constructive history such as paying your bills on time, but overwhelmingly, credit reports are used by creditors to examine your capability to repay debts by assessing your past behaviour.

When financial institutions inspect your credit report, you usually either get a pass or fail so any default irrespective of its severity can have a long-lasting effect on your financial possibilities for years to come. Even though finding solutions to enhance a poor credit report can be challenging, there are specific things you can do to improve it. Luckily, we’ve gathered a list of suggestions that you can try to strengthen your credit report and your overall financial health.

Review your credit report for any errors

The first step is to inspect your credit report to discover exactly what it comprises of. You can do this by paying a small fee to a company like ‘Check My Credit File’ (https://www.mycreditfile.com.au). It’s not unusual for errors to be made on credit reports which can have a negative impact on your financial abilities. Read your credit report thoroughly and dispute any oversights that you discover to make sure your credit report appropriately emulates your financial history. Some typical errors that can occur are:

  • Errors in personal details
  • Wrongful defaults and judgements
  • Old defaults and judgements
  • Inaccurate information relating to your credit history

If you find any oversights, alert the credit reporting agency in writing so these listings can be adjusted or removed to emulate your true credit history.

Pay your bills on time

Lots of people underestimate how vital it is to pay your bills on time. In some cases, individuals can be forgetful considering that they have too many bills to pay, so it’s a clever idea to talk to all your lenders and ask them to automatically debit your bank account each month. Usually, your lenders would be more than happy to do this as posting paper invoices is time-consuming and costly. By placing all your bills on autopilot, you can be certain that they’ll be paid on time and in full, which will have a positive effect on your credit report

Add additional information to your credit report

There are particular details throughout your credit report which creditors will view positively. For instance, if you are married, have been working for the same company for more than two years, or you are a homeowner, then this information will improve your credit report. Creditors generally view this information in a positive light and it can help you in future credit applications. If you find that this type of information is missing from your credit report, alert the credit reporting agency and ask that it be included.

Steer clear of too many credit applications

Every time you make an application for a line of credit, it is noted on your credit report. Evidently, excessive applications for credit will have an unfavorable effect on your credit report and the way in which creditors view your financial behaviours. It’s important that you are sensible and selective when making an application for credit and only apply when you are optimistic it will be approved. In addition, if you recently had a credit application turned down, wait a respectable amount of time before applying again.

Look at a debt consolidation loan

Naturally, it can be very hard to control your debts when then you have lots of them. Overlooking just one debt repayment can turn into 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. Typically, 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, get in contact with our friendly team at Bankruptcy Advice Adelaide on 1300 879 867, or alternatively visit our website for additional information: www.bankruptcy-advice.com.au/Adelaide

 

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