Whether we acknowledge it or not, our credit report has a notable influence on our lives. It’s sort of like our health; we don’t appreciate good health until we lose it. Most people don’t even learn that 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, considering that even one missed payment that is documented 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 report that stipulates information about your financial history with financial institutions. In recent years, credit reports have been redesigned to place greater focus on favourable history like paying your bills on time, but overwhelmingly, credit reports are used by lenders to evaluate your capability to repay debts by assessing your past behaviour.
When financial institutions inspect your credit report, you usually either get a pass or fail so any default regardless of its severity can have a long-lasting influence on your financial prospects for years to come. Even though finding solutions to enhance a poor credit report can be tough, there are various things you can do to boost it. Fortunately, we’ve assembled a list of ideas that you can try to enhance your credit report and your overall financial health.
Examine your credit report for any mistakes
The first step is to review your credit report to find exactly what it features. 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 negative influence on your financial abilities. Read your credit report meticulously and challenge any mistakes that you discover to ensure your credit report accurately reflects your financial history. Some general oversights that can occur are:
- Mistakes in personal details
- Wrongful defaults and judgements
- Old defaults and judgements
- Incorrect information relating to your credit history
If you unmask any oversights, inform the credit reporting agency in writing so these listings can be adjusted or removed to reflect your true credit history.
Pay your bills on time
Individuals underestimate how important it is to pay your bills on time. Sometimes, people can be forgetful simply because they have too many bills to pay, so it’s a smart idea to talk to all your creditors and ask them to automatically debit your bank account every month. Typically, your creditors would be more than happy to do this as posting paper statements is time-consuming and costly. By placing 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 extra information to your credit report
There are certain details within your credit report which lenders will view positively. For example, if you are married, have been working for the same workplace for more than two years, or you are a property owner, then this information will improve your credit report. Creditors typically view this information in a positive light and it can assist in future credit applications. If you uncover that this kind of information is missing from your credit report, advise the credit reporting agency and ask that it be added.
Steer clear of excessive credit applications
Every time you make an application for a line of credit, it is mentioned on your credit report. Evidently, excessive applications for credit will have a damaging impact on your credit report and the way in which creditors view your financial behaviours. It is very important that you are sensible and selective when making an application for credit and only apply when you are confident it will be approved. Moreover, if you recently had a credit application declined, wait a decent amount of time before applying again.
Look into a debt consolidation loan
Naturally, it can be very hard to control your debts when then you have lots of them. Overlooking 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. 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, reach out to our friendly team at Bankruptcy Experts Gympie on 1300 795 575, or alternatively visit our website for additional information: www.bankruptcyexpertsgympie.com.au