Regardless if we understand it or not, our credit report has a significant influence on our lives. It’s sort of like our health; we don’t appreciate good health until we lose it. Lot of people don’t even find out they have a poor 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, considering that even one overlooked payment that is documented by your lender can remain on your credit report for up to seven years.
So, what is a credit report? A credit report is a document that points out details about your financial history with lenders. In recent years, credit reports have been redesigned to place greater attention on favourable history like paying your bills on time, but overwhelmingly, credit reports are used by lenders to analyse your ability to repay debts by assessing your past behaviour.
When lenders review your credit report, you generally either get a pass or fail so any default regardless of its severity can have a long-lasting effect on your financial possibilities for years to follow. Although finding solutions to boost a poor credit report can be tough, there are various things you can do to strengthen it. Luckily, we’ve gathered a list of recommendations that you can try to strengthen your credit report and your general financial health.
Examine your credit report for any mistakes
The first step is to examine your credit report to discover exactly what it contains. You can do this by paying a modest fee to a firm like ‘Check My Credit File’ (https://www.mycreditfile.com.au). It’s not uncommon for oversights to be made on credit reports which can have an adverse impact on your financial abilities. Read your credit report extensively and challenge any oversights that you find to make sure your credit report accurately reflects your financial history. Some typical errors that can occur are:
- Mistakes in personal information
- Wrongful defaults and judgements
- Old defaults and judgements
- Incorrect information concerning your credit history
If you find any mistakes, inform the credit reporting agency in writing so these listings can be amended or removed to reflect your true credit history.
Pay your bills on time
People underestimate how vital 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 an intelligent idea to contact all your creditors and ask them to automatically debit your bank account every month. Normally, your creditors would be more than happy to do this as sending paper statements 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 additional information to your credit report
There are certain details throughout your credit report which lenders will view positively. For instance, if you are married, have been employed by the same employer for more than two years, or you are a property owner, then this information will boost 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 kind of information is missing from your credit report, notify the credit reporting agency and ask that it be added.
Avoid excessive credit applications
Every time you apply for a line of credit, it is noted on your credit report. Clearly, too many applications for credit will have a harmful effect on your credit report and the way in which lenders view your financial behaviours. It is imperative that you are vigilant and selective when making an application for credit and only apply when you are optimistic it will be accepted. Also, if you recently had a credit application turned down, wait a decent amount of time before applying again.
Think about a debt consolidation loan
Certainly, it can be very challenging 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 at least five years. Contemplate a single debt consolidation loan which will accumulate all your debts into one, single, monthly repayment. Usually, 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, speak with our friendly team at Bankruptcy Experts Tweed Coast on 1300 795 575, or alternatively visit our website for more information: Bankruptcy Tweedcoast