June 19, 2018 0

Best Ways to Improve a Poor Credit Report

Posted by:Charles Bosse onJune 19, 2018

Whether we understand it or not, our credit report has a significant impact on our lives. It’s kind of like our health; we don’t appreciate good health until we lose it. Lot of people don’t even find out they have a poor credit report until they apply for a personal line of credit and it’s disapproved. It can come as quite a shock to some, considering that even one missed payment that is documented by your creditor can stay on your credit report for a maximum of seven years.

So, what is a credit report? A credit report is a record that stipulates details about your financial history with financial institutions. Recently, credit reports have been redesigned to place greater importance on constructive history like paying your bills on time, but overwhelmingly, credit reports are used by creditors to evaluate your capability to repay debts by assessing your past behaviour.

When lenders review your credit report, you generally either get a pass or fail so any default regardless of its severity can have a long-lasting impact on your financial prospects for years to follow. Even though finding solutions to strengthen a bad credit report can be complicated, there are various things you can do to improve it. Luckily, we’ve gathered a list of suggestions that you can try to improve your credit report and your general financial health.

Examine your credit report for any oversights

The first step is to check your credit report to uncover exactly what it contains. You can do this by paying a small fee to an agency like ‘Check My Credit File’ (https://www.mycreditfile.com.au). It’s not rare for errors to be made on credit reports which can have a damaging influence on your financial capabilities. Read your credit report extensively and challenge any errors that you find to make sure your credit report appropriately reflects your financial history. Some standard mistakes that can occur are:

  • Mistakes in personal details
  • Wrongful defaults and judgements
  • Old defaults and judgements
  • Inaccurate information relating to your credit history

If you uncover any mistakes, alert the credit reporting agency in writing so these listings can be altered or removed to reflect 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 simply because they have too many bills to pay, so it’s a clever idea to contact all your creditors and ask them to automatically debit your bank account every month. Usually, your lenders would be more than happy to do this as delivering paper statements is time-consuming and costly. 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 specific details within your credit report which creditors will view favourably. For example, if you are married, have been working for the same employer for over two years, or you are a homeowner, then this information will boost your credit report. Creditors typically 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, inform the credit reporting agency and ask that it be added.

Steer clear of too many credit applications

Each time you make an application for a line of credit, it is recorded on your credit report. Evidently, excessive applications for credit will have a detrimental effect on your credit report and the way in which creditors view your financial behaviours. It is essential that you are prudent and selective when requesting credit and only apply when you are optimistic it will be approved. Moreover, if you recently had a credit application rejected, wait a respectable amount of time before applying again.

Look into a debt consolidation loan

Generally, it can be very problematic to control your debts when then you have lots of them. Forgetting just one debt repayment can become a default, which will stay on your credit report for a minimum of five years. Consider a single debt consolidation loan which will accumulate all your debts into one, single, monthly repayment. Typically, interest rates on debt consolidation loans are fairly 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, talk with our friendly team at Fresh Start Solutions Hobart on 1300 818 575, or alternatively visit our website for additional information: http://freshstartsolutions.com.au/bankruptcy-hobart

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