Best Ways to Repair a Poor Credit Report

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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 appreciate good health until we lose it. Most people don’t even find out they have a bad credit report until they make an application for a personal line of credit and it’s disapproved. It can come as quite a shock to some, simply because even one missed payment that is documented by your creditor can stay on your credit report for up to seven years.

So, what is a credit report? A credit report is a document that stipulates information about your financial history with financial institutions. Recently, credit reports have been remodelled to place greater focus on constructive history like paying your bills on time, but overwhelmingly, credit reports are used by financial institutions to gauge your capability to repay debts by assessing your past behaviour.

When financial institutions inspect your credit report, you typically 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 come. Whilst finding solutions to strengthen a poor credit report can be challenging, there are specific things you can do to enhance it. Fortunately, we’ve compiled a list of suggestions that you can try to strengthen your credit report and your overall financial health.

Inspect your credit report for any errors

The first step is to check your credit report to find exactly what it consists of. 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 out of the ordinary for mistakes to be made on credit reports which can have an adverse influence on your financial abilities. Read your credit report meticulously and challenge any errors that you find to make sure your credit report accurately mirrors your financial history. Some typical mistakes that can occur are:

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

If you discover 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 valuable it is to pay your bills on time. In some cases, individuals can be forgetful simply because they have too many bills to pay, so it’s an intelligent idea to contact all your lenders and ask them to automatically debit your bank account every month. Normally, your lenders would be more than happy to do this as sending paper statements is time-consuming and expensive. By putting all your bills on autopilot, you can be certain 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 example, if you are married, have been working with the same employer for more than two years, or you are a homeowner, then this information will strengthen your credit report. Lenders commonly view this information in a positive light and it can help you in future credit applications. If you see that this type of information is missing from your credit report, notify the credit reporting agency and request that it be provided.

Avoid excessive credit applications

Each time you request a line of credit, it is documented on your credit report. Evidently, too many applications for credit will have an unfavorable effect on your credit report and the way in which lenders view your financial behaviours. It’s important that you are prudent and selective when applying for credit and only apply when you are confident it will be accepted. Likewise, if you recently had a credit application denied, wait a decent amount of time before applying again.

Take into consideration a debt consolidation loan

Naturally, it can be very complicated to control 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. Look at a single debt consolidation loan which will accumulate all your debts into one, single, monthly repayment. Commonly, 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 Experts Mildura on 1300 795 575, or alternatively visit our website for further information: www.bankruptcyexpertsmildura.com.au

 

By | 2018-07-16T03:07:25+00:00 June 20th, 2018|Articles, bankruptcy, blog|0 Comments

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