Best Ways to Repair a Poor Credit Report

Best Ways to Repair a Poor Credit Report

Whether we understand it or not, our credit report has a substantial effect on our lives. It’s kind of like our health; we don’t cherish good health until we lose it. Many people don’t even realise they have a poor credit report until they make an application for a personal line of credit and it’s rejected. It can come as quite a shock to some, since even one overlooked payment that is reported by your creditor can stay on your credit report for a maximum of seven years.

So, what is a credit report? A credit report is a document that specifies information about your financial history with lenders. In recent times, credit reports have been revamped to place greater attention on favourable history like 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 check 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 opportunities for years to follow. While finding solutions to boost a bad credit report can be difficult, there are a number of things you can do to strengthen it. The good news is, we’ve gathered a list of recommendations that you can try to improve your credit report and your general financial health.

Examine your credit report for any mistakes

The first step is to check your credit report to discover 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 uncommon for mistakes to be made on credit reports which can have a damaging effect on your financial capabilities. Read your credit report carefully and dispute any errors that you find to make sure your credit report appropriately mirrors your financial history. Some typical oversights that can occur are:

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

If you unveil any oversights, 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

Individuals underestimate how important it is to pay your bills on time. In some cases, people can be forgetful simply because they have too many bills to pay, so it’s a smart idea to contact all your lenders and ask them to automatically debit your bank account each month. Normally, 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 in full and on time, which will have a positive impact on your credit report

Add additional information to your credit report

There are particular details within your credit report which creditors will view positively. For example, if you are married, have been working with the same company for more than two years, or you are a homeowner, then this information will improve your credit report. Lenders 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 request that it be included.

Keep away from excessive credit applications

Every time you make an application for a line of credit, it is recorded on your credit report. Obviously, too many applications for credit will have a damaging effect on your credit report and the way in which creditors 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. At the same time, if you recently had a credit application rejected, wait a respectable amount of time before applying again.

Think about a debt consolidation loan

Of course, it can be very tough to oversee your debts when then you have lots of them. Forgetting just one debt repayment can become a default, which will remain on your credit report for a minimum of five years. Contemplate a single debt consolidation loan which will accumulate all your debts into one, single, monthly repayment. Commonly, 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 Darwin on 1300 795 575, or alternatively visit our website for additional information: www.bankruptcyexpertsdarwin.com.au

 

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