Fixing your bad credit rating is easier than you think
Planning
22 January, 2018 - 10:13 AM GMT

Fixing your bad credit rating is easier than you think

Sometimes your debts can get out of control and when this happens your credit rating can be affected.

A negative credit rating can have impacts on your future potential to borrow which can be problematic when it comes time to apply for that new credit card, personal loan or mortgage. So how can you repair your credit rating and get your borrowing power back into tip top shape? These 7 tips will get you on the right track.

  1. Access your credit history

The first thing you need to do is actually obtain a copy of your credit report. You can apply for a free credit report via one of the certified credit reporting bodies (CRB) accessible via  the Office of the Australian Information Commissioner. You will need to provide your full name, address, date of birth, previous address and driver’s licence number. It can take up to 10 days to receive your report. Or you can pay a fee to get access to the report immediately.

The report will provide you with the same information that is given to any lender when you apply for credit. It contains information about your financial history including any late payments or defaults.

  1. Knowledge is power

Occasionally mistakes are made and your credit report may contain inaccuracies. These mistakes can reflect badly on your ability to receive credit so it is important to correct any errors. Common mistakes include incorrect details of credit history, mistaken defaults or judgements, old defaults still appearing in your history past the expiry (bad debt usually remains on your credit history for up to 7 years) and inaccuracies in personal details. If you find any errors, it is important to notify the CRB immediately in writing. Any unsubstantiated errors will be removed immediately. Other mistakes may require documentation before this will happen.

 

  1. Consolidate your debt

If you have multiple credit cards and personal loans and are in danger of defaulting on your payments, you should consider consolidating your debt. Putting all of your debts into a single debt consolidation loan will ensure your debt becomes more manageable. It will eliminate any current defaults and assist you in ensuring you stay on top of your debt by converting all your debts into a single more manageable loan payment.

  1. Choose autopay

With our busy lifestyles, it’s easy to miss out on paying a bill on time. Do this often enough and it can lead to a bad credit rating. To take the stress out of the equation you can automatically set up for your bills to be paid straight out of your account on the due date. Say goodbye to late payment fees forever!

  1. Highlight your good deeds

Did you know if you are married or have been with the same employer for more than two years this can assist your credit rating? Lenders usually look for stability and nothing says stability like a steady job and partner. You can notify your credit reporting agency to ask them to include this information in your report.

  1. Start from scratch

Start building your new reputation from scratch by developing a good credit history. Make sure any payments you make from now on – whether it be for your mobile phone, your electricity or your new debt consolidation loan – are paid on time. By meeting your monthly obligations on time every month you can begin to arrest your bad credit rating and turn the tide to reflect the new you.

  1. Stick to the program

If you want to ensure you don’t foul up all your good work you need to make a few positive changes to your spending habits. Don’t live beyond your means. Spend less than you earn and if you can endeavor to put at least 10 percent of your monthly wage away as savings, do it! Don’t make late payments and voila! You’re on your way to maintaining a good credit rating for the future.