Best Ways to Repair a Bad Credit Report

Whether we realise 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 individuals don’t even realise they have a poor credit report until they make an application for a personal 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 financial institution can remain on your credit report for up to seven years.

So, what is a credit report? A credit report is a document that stipulates details about your financial history with creditors. Recently, 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 lenders to evaluate your ability to repay debts by assessing your past behaviour.

When creditors inspect your credit report, you generally 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. While finding solutions to improve a bad credit report can be challenging, there are a number of things you can do to enhance it. Luckily, we’ve compiled a list of recommendations that you can try to strengthen your credit report and your overall financial health.

Review your credit report for any oversights

The first step is to check your credit report to discover exactly what it features. You can do this by paying a modest fee to a company like ‘Check My Credit File’ (https://www.mycreditfile.com.au). It’s not out of the ordinary for oversights to be made on credit reports which can have a negative impact on your financial abilities. Read your credit report extensively and dispute any oversights that you find to ensure your credit report appropriately reflects your financial history. Some common oversights that can occur are:

  •  Errors in personal information
  •  Wrongful defaults and judgements
  •  Old defaults and judgements
  •  Incorrect information relating to your credit history

If you uncover any mistakes, notify 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

Individuals underestimate how critical it is to pay your bills on time. Occasionally, people can be forgetful considering that they have too many bills to pay, so it’s an intelligent idea to speak to all your lenders and ask them to automatically debit your bank account each month. Usually, your creditors would be more than happy to do this as posting paper invoices is time-consuming and expensive. By placing all your bills on autopilot, you can be certain that they’ll be paid in full and on time, which will have a positive effect on your credit report

Add additional information to your credit report

There are certain 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 boost your credit report. Creditors normally view this information in a positive light and it can help you in future credit applications. If you uncover that this type of information is missing from your credit report, advise the credit reporting agency and request that it be provided.

Steer clear of too many credit applications

Each time you apply for a line of credit, it is mentioned on your credit report. Clearly, too many applications for credit will have a detrimental effect on your credit report and the way in which creditors view your financial behaviours. It is paramount that you are shrewd and selective when making an application for credit and only apply when you are confident it will be accepted. Also, if you recently had a credit application turned down, wait a respectable amount of time before applying again.

Look at a debt consolidation loan

Naturally, it can be very complicated to control your debts when then you have lots of them. Neglecting just one debt repayment can turn into a default, which will stay on your credit report for a minimum of 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, reach out to our friendly team at Bankruptcy Experts Geelong on 1300 795 575, or alternatively visit our website for additional information: www.bankruptcyexpertsgeelong.com.au

 

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