How To Fix Your Credit Report
How To Fix It For Free!
If you haven’t needed to borrow for a while you may be surprised about what might have been recorded against your credit file. We don’t always know that we have a less than perfect credit report card until we:
- (1) need urgent access to money;
- (2) need a car loan;
- (3) need a home loan; or
- (4) just need to borrow for any of life’s events.
If you’re looking borrow in the near future or you’ve just been knocked back on a loan application because of your past credit history then
here is what you can do to correct problems which show on your file.
Step 1. You can gain access to your credit file at any time. You can get your file for free from any of the three credit agencies that operate in Australia – Veda, Dun & Bradstreet, or Experian. If you’re prepared to wait for ‘snail-mail’ normal postage then you usually can get your file for free. If you want it sooner, then a small charge is applied to your on-line request.
Step 2. Read your credit file carefully to make sure that what is showing on your report is correct. There are now disclosures that must be made by service providers, goods suppliers, and credit providers to reporting agencies (such as Veda, D & B, Experian) which you may not be aware of.
Step 3. You will need to resolve any outstanding issues which show on your report. These issues might be the result of an unpaid bill or a loan that was not successfully paid out.
Step 3: Fix any past problems showing in your file directly with the credit, goods, or service provider. Alternatively, if you disagree with the problem, you may be able to record notes on your file (via a ratings agency) so that the problem does not negatively impact on your chances of getting any loan application approved.
Step 4: Don’t pay to get this work done by someone else! You may come across firms that say they will do this work for you but the fees are extremely high. It is actually very easy to do although it is a little time consuming. Some of these firms will charge you high fees and all you will get is a list of things that must be worked through (just like the steps listed here) and you are the one who has to do it!
Step 5: If you have worked through the issues with your providers and you agree that you still owe money, then you need to get these bills paid as soon as possible. The easiest way is to set up direct debits for regular payment amounts as agreed with your provider.
Step 6: If not paying your regular bills on time has been a past problem then arrange for direct debit payments so that you won’t forget them in the future. Alternatively, you can set up payment reminders in your phone or online calendars. Always notify all your service and credit providers if you move house. You may not receive a bill on time if you move house and then forget that it should have been paid.
Step 7: If you approach the task methodically and with determination, you will eventually be able to show a good credit report to future creditors. Don’t become too down-hearted if it takes a while to re-build a good credit file.
Step 8: Part of the credit-file-rebuilding process is to, in future:
(a) Only make credit applications when you are serious about needing to borrow. Too many applications against one person’s name can be an indication that they are in financial trouble:
(b) Always talk to your service or credit provider immediately if you are having problems meeting repayments. Such providers all have “hardship policies” in place which may help save your credit rating if you come to an early agreement about reduced repayments, etc.
Being serious about fixing a bad credit file can have important benefits to you in the future.
A good credit rating is important to make sure that you always have utilities and other services available to you (phone, water, electricity, insurances, etc). And also may just be the difference between getting a car or home loan when you want or need it and at an interest rate you can afford.
Be proactive and take the task of maintaining a good credit history seriously.