Best Ways to Repair a Bad Credit Report
Regardless if we acknowledge it or not, our credit report has a serious influence on our lives. It’s sort of like our health; we don’t treasure good health until we lose it. Most people don’t even know they have a bad 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 disclosed by your creditor can stay on your credit report for as much as seven years.
So, what is a credit report? A credit report is a document that points out information about your financial history with lenders. In recent years, credit reports have been revamped to place greater focus on favourable history like paying your bills on time, but overwhelmingly, credit reports are used by financial institutions to evaluate your capability 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 prospects for years to come. Although finding solutions to repair a poor credit report can be complicated, there are particular things you can do to improve it. Fortunately, we’ve compiled a list of ideas that you can try to strengthen your credit report and your general financial health.
Check your credit report for any errors
The first step is to examine your credit report to learn exactly what it features. You can do this by paying a modest fee to a business 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 adverse effect on your financial capabilities. Read your credit report carefully and dispute any mistakes that you find to ensure your credit report accurately emulates your financial history. Some standard 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 unmask any oversights, alert the credit reporting agency in writing so these listings can be amended or removed to mirror your true credit history.
Pay your bills on time
People underestimate how valuable 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 wise idea to get in touch with 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 sending paper invoices is time-consuming and expensive. By putting 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 certain details within your credit report which creditors will view favourably. As an 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 assist in future credit applications. If you discover that this type of information is missing from your credit report, advise the credit reporting agency and request that it be added.
Avoid too many credit applications
Each time you request a line of credit, it is documented on your credit report. Evidently, excessive applications for credit will have a damaging effect on your credit report and the way in which lenders view your financial behaviours. It is imperative that you are sensible and selective when applying for credit and only apply when you are optimistic it will be approved. Furthermore, if you recently had a credit application rejected, wait a decent amount of time before applying again.
Contemplate a debt consolidation loan
Of course, it can be very tricky to oversee your debts when then you have lots of them. Forgetting just one debt repayment can turn into a default, which will remain on your credit report for at least five years. Look at 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 effect on your credit report. If you’re interested in a debt consolidation loan, speak to our friendly team at Bankruptcy Experts Melbourne on 1300 795 575, or alternatively visit our website for additional information: www.bankruptcyexpertsmelbourne.com.au