Credit History and Score
August 8, 2020
What is the Importance of Good Credit History and Score?
Are you applying for a credit card or a home loan, bad credit often means the difference between approved and declined.
Negative or low credit scores often paint a picture to lenders that you might have trouble paying them back, even if you’re confident and afford to pay it back.
However, if you a lower score and have trouble getting a loan or credit card, here are some ways to start repairing your credit score and take control of your finances again.
What does Credit Repair mean?
Credit repair is simply how you may improve your credit rating so that your applications look more attractive to all potential lenders. A good credit score shows lenders that you can pay your loan debts on time, and that you’re reliable.
Be mindful Credit repair doesn’t happen overnight, but there are straightforward steps you can take to start the process and get a good score in the near future.
Credit Report or History is a detailed record of all the times you borrow or make an application to borrow or apply for any utilities like Electricity, gas, or Mobile phone/Internet plans.
The results of this report are collated to give you what’s known as a credit score, or rating.
It’s important for you to get familiar with what your credit rating looks like- Simply put it this way, you can’t fix your credit if you don’t know where the problems are, after all.
There are a number of government-recommended Credit Reporting Bodies (CRBs) who will provide you with a free copy of your credit report, including Equifax (formerly Veda) & Illion (formerly Dun & Bradstreet).
Credit Report/File errors
It is possible due to some silly administrative mistake you get your application declined. If you do a loan application and it gets rejected.
The first thing you’ll want to do when you obtain your report goes through it carefully and look for any errors.
Some common file errors include:
- Name, address, and/or personal details;
- Debt duplication;
- Debts wrongly under your name; and
- Inaccurate repayment details.
- Loan applications are done without your knowledge or due to ID theft.
We strongly suggest, as soon as you spot a mistake in your history, report the error to the CRB (Credit Reporting Body) who can remedy small errors.
Otherwise, contact the credit provider immediately.
This process can be complex, and lenders might dispute your position. Our specialists with over 15 years of experience can help you through this.
If you are under severe financial hardship, it is recommended to communicate with your lender and explain your situation. Under (National Consumer Credit Protection) NCCP act 2009 all banks, and lenders have an obligation to assist their customers experiencing financial hardship.
The credit providers cannot report any negative listing on your profile if you are under ‘Financial Hardship’ and they are bound by the act to offer you reasonable support during this time.
If you fail to notify your credit provider like (Banks) it can jeopardize your situation, a poor repayment history, for example frequently defaulting on payments, can stay on your file for up to 5 years.
More serious financial problems, such as bankruptcy and Debt Agreements, stay on your file for 7 years. It’s a good idea to wait until these “fall off” your report before applying for loans such as home loans.
Improving Your Credit History
Simple ways to improve your credit score/history include:
- Don’t apply with too many credit providers at one time or in 3-6 months period;
- Only take a loan based on what you can afford;
- Be ahead of your repayments or at least make your repayments on time going forward;
- Tell your creditors if you’re struggling to make repayments so that the debt doesn’t automatically become a default; and
- Always make sure you know your credit score and take action as appropriate.
The Negotiators provide impartial and confidential financial consultations and debt negotiation. To speak with one of our specialists and start taking control of your finances again, call us on 0432 786 073 or reach out to email.
If you have too much debt and it is out of control, do not wait or stress any further simply call us or visit our website, our team of experienced specialist can do the lump-sum negotiation for you, we can save you up to 80% of your entire debt. We work on the “No Win, No Fees” basis for your peace of mind.