Best Ways to Improve a Bad Credit Report

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Best Ways to Improve a Bad Credit Report

Regardless if we realise it or not, our credit report has a substantial impact on our lives. It’s sort of like our health; we don’t appreciate good health until we lose it. Many people don’t even realise they have a bad credit report until they apply for a personal line of credit and it’s rejected. It can come as quite a shock to some, simply because even one missed payment that is disclosed by your financial institution can remain on your credit report for as much as seven years.

So, what is a credit report? A credit report is a record that stipulates information about your financial history with creditors. In recent times, credit reports have been overhauled to place greater emphasis on favourable history such as paying your bills on time, but overwhelmingly, credit reports are used by financial institutions to examine your ability to repay debts by assessing your past behaviour.

When lenders inspect your credit report, you typically 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. Even though finding solutions to strengthen a poor credit report can be challenging, there are certain things you can do to improve it. Fortunately, we’ve put together a list of suggestions 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 inspect your credit report to find out exactly what it consists of. 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 errors to be made on credit reports which can have a detrimental effect on your financial abilities. Read your credit report meticulously and challenge any errors that you find to ensure your credit report appropriately emulates your financial history. Some common mistakes that can occur are:

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

If you find any oversights, inform 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

Individuals underestimate how crucial it is to pay your bills on time. In some cases, people can be forgetful considering that they have too many bills to pay, so it’s a smart idea to call all your lenders and ask them to automatically debit your bank account every month. Often, your creditors would be more than happy to do this as sending paper statements is time-consuming and costly. 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 particular details throughout your credit report which lenders will view positively. As an example, if you are married, have been working for the same company for over two years, or you are a homeowner, then this information will improve your credit report. Creditors generally view this information in a positive light and it can assist 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.

Avoid excessive credit applications

Each time you apply for a line of credit, it is noted on your credit report. Obviously, excessive applications for credit will have an adverse effect on your credit report and the way in which lenders view your financial behaviours. It is essential that you are vigilant and selective when making an application for credit and only apply when you are optimistic it will be approved. Likewise, if you recently had a credit application declined, wait a decent amount of time before applying again.

Think about a debt consolidation loan

Certainly, it can be very complicated 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 into 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 effect on your credit report. If you’re interested in a debt consolidation loan, contact our friendly team at Bankruptcy Experts Sunshine Coast on 1300 795 575, or alternatively visit our website for additional information: www.bankruptcyexpertssunshinecoast.com.au

 

By | 2018-07-16T02:08:48+00:00 June 20th, 2018|Bankruptcy|0 Comments

About the Author:

Director of Fresh Start Solutions and specialises in helping people free themselves from overwhelming debt. Whether it's Bankruptcy, Liquidation, Insolvency Advice or simply General Debt Advice.