How to Fix Your Bad Credit Record and Repair Your Credit Rating

Fixing Your Bad Credit Record and Repairing Your Credit Rating

If you’re unsure whether or not you have a bad credit record, it can be difficult to begin working to repair your credit rating until you know what’s listed on there.

There are several things you can do to help improve your credit rating. Here are some suggestions to turn your bad credit record around.

Know What’s On Your Credit File

Your credit file should contain listings of any credit enquiries you’ve made over the past five years. This can include any credit cards, loans, mobile phones and other types of credit contracts.

If you’ve missed any payments on your power bills or phone bills or credit card or loan repayments or gone over the credit limit on your credit card once too often, then you may find your creditors have listed it as an ‘unpaid default’.

Your creditors will try to contact you several times to get a payment made to put your account back in order, but if this doesn’t happen, you could find the debt goes to a collection agency. You could also end up with a judgment listed on your credit rating if your creditor takes you to court to recoup the amount of money you owe.

If you’re unsure what’s listed on your own credit file, you can get a free copy sent to you by contacting Veda Advantage at www.mycreditfile.com.au . Your report should arrive in about 10 working days.

Remove Any Errors or Disputes

Phone companies are notorious for listing defaults on people’s credit files. If you believe your phone company has listed an unpaid default on your credit report, you can ask them to have it rectified, or at least changed to read ‘paid default’.

You may also notice incorrect information entered onto your credit file. This could be a lender entering information for someone with a similar name to yours and ending up on your report in error, or it could be that you’ve been a victim of identity theft.

Either way, these things can contribute to you having a bad credit record if they’re not cleared up.

Improve Your Credit Rating

If you’re currently behind on any payments or bills, catch them up as quickly as you can. Pay down your credit card balances so you’re not at risk of going over your approved credit limit.

Call any creditors who may have given you an ‘unpaid default’ listing and let them know that the overdue amount has been cleared. Try to negotiate with them to alter their listing to read ‘paid default’.

Another good step for improving your credit rating is to avoid making any new credit enquiries for a little while. The number of enquiries listed on your report can be a deterrent for some banks and lenders, so be sure you hold off from applying for new credit until you’re sure you have a stronger chance of being approved.

Re-Work Your Budget

If you already know you have a history of forgetting to pay bills or repayments on time, it might be time to rework your budget.

An easier way to help keep up with repayments and bills is to pay smaller amounts off the total bill every time you get paid. For example, if you know your credit card bill is going to be $100 at the end of the month, pay $25 each week when your pay arrives so you know it will be easier to keep up with the repayments.

This kind of frequent repayment can be a positive factor with some banks when you’re applying for new credit, as it shows them that you’re working to make sure you don’t fall into the same bad credit cycle again.

Order a copy of your credit file

Receive email alerts whenever specific changes occur on your credit file for 12 months. You also receive a copy of your credit file despatched within one working day..

Receive your credit file with information on:

• Details of consumer credit enquiries
• Details of overdue consumer credit accounts
• Commercial credit enquiries
• Details of overdue commercial credit accounts
• Bankruptcy & Court Judgements
• Writs & Summons
• Information on your current relationship with a credit provider

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