Best Ways to Improve a Poor Credit Report

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Regardless if we acknowledge it or not, our credit report has a meaningful effect on our lives. It’s sort of like our health; we don’t appreciate good health until we lose it. Lots of people don’t even learn that 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 shock to some, simply because even one overlooked payment that is reported by your lender can remain on your credit report for a maximum of seven years.

So, what is a credit report? A credit report is a report that specifies details about your financial history with lenders. Recently, credit reports have been remodelled to place greater emphasis on constructive history such as paying your bills on time, but overwhelmingly, credit reports are used by creditors to evaluate your ability to repay debts by assessing your past behaviour.

When lenders inspect your credit report, you commonly either get a pass or fail so any default regardless of its severity can have a long-lasting influence on your financial possibilities for years to follow. Even though finding solutions to repair a poor credit report can be complicated, there are specific things you can do to boost it. Fortunately, we’ve put together a list of suggestions that you can try to boost your credit report and your overall financial health.

Review your credit report for any oversights

The first step is to examine your credit report to find exactly what it contains. 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 unusual for oversights to be made on credit reports which can have an unfavourable effect on your financial abilities. Read your credit report extensively and challenge any errors that you find to ensure your credit report accurately mirrors your financial history. Some typical mistakes that can occur are:

  • Mistakes in personal information
  • Wrongful defaults and judgements
  • Old defaults and judgements
  • Inaccurate information regarding your credit history

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

Pay your bills on time

Lots of people underestimate how crucial it is to pay your bills on time. Sometimes, people can be forgetful considering that they have too many bills to pay, so it’s a wise idea to call all your creditors and ask them to automatically debit your bank account each month. Typically, your creditors would be more than happy to do this as delivering paper invoices is time-consuming and expensive. 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 particular details within your credit report which creditors will view favourably. For example, if you are married, have been employed by the same company for more than 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 help you in future credit applications. If you discover that this sort 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

Every time you make an application for a line of credit, it is mentioned on your credit report. Naturally, excessive applications for credit will have a harmful impact on your credit report and the way in which lenders view your financial behaviours. It is crucial that you are reasonable and selective when requesting credit and only apply when you are confident it will be accepted. Likewise, if you recently had a credit application declined, 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. Forgetting 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. 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, call our friendly team at Bankruptcy Advice on 1300 879 867, or alternatively visit our website for additional information: www.bankruptcy-advice.com.au/