Are you struggling with a bad credit report?
A growing number of Australians are accumulating a less than perfect credit record, making it difficult to obtain a loan from the big lenders. Whilst the effects of a bad credit record can be far reaching, it is possible to work towards implementing good financial habits to create a good credit record over time.
Fixing bad credit can help you achieve your long term financial goals. But even if you are worried about your credit score or you have a history of bad credit, The Loan Panel can still help you into a new vehicle. Speak to us today about one of our bad credit financing options to fit your needs.
Here, The Loan Panel recommends 5 beneficial ways to help you get rid of your bad credit.
1. Pay off existing debt
If you’re struggling to make the payments for your various loans, then you might want to look at consolidating your debts into one loan. Having multiple loans with varying interest rates can prove to be difficult to manage and as a result, you may find yourself defaulting on payments. A debt consolidation loan allows you to effectively manage a single, easy monthly payment.
If you are unable to negotiate a debt consolidation loan with your financial institution then you will need to prioritize your debts, paying off your secured debts first. When it comes to having multiple credit card loans under your name, you should focus on paying off the debts with the highest interest rates first.
2. Run a credit check on yourself
Your credit file holds a number of personal information, including past and current loans that are in your name, details of any credit applications made and a history of past and present overdue accounts. It’s important to check your file for errors, suspicious activities and evidence of identity theft, as this can bring down your overall credit score; making it difficult to obtain approval for a loan from lenders in the future.
You can request a copy of your credit file, free of charge, from a reliable credit reporting agency such as VEDA or Dun & Bradstreet. Your credit file can be obtained within 10 working days, however, if you need access to your credit file sooner, you can acquire it within a few days for a fee.
3. Credit repair
Once you’ve obtained a copy of your file, check that the information listed is correct. Be sure to note down any listings which appear to be incorrect or suspicious. If you find a listing that is inaccurate, you will need to contact the company or bank that submitted the listing to have the information rectified. For example, if you have paid an overdue account, then the company is obligated to update their listings to reflect this. It is vital to ensure that the information listed in your file is accurate as finance lenders use this information to assess your credibility when reviewing loan applications.
4. Improve your credit
Improving your credit doesn’t have to be challenging. You can create a record which proves that your good credit outweighs the bad by simply using your credit card to cover your everyday expenses, such as your groceries, bills and petrol. By putting your everyday expenses on your credit card and paying it off regularly and on time every month, you can easily turn your bad credit into good credit.
5. Set up Direct Debit
Setting up direct debit allows for your service providers to automatically withdraw payments on set dates; allowing you to stay on top of your bills or loan repayments without missing a due date again. This is a great way to build a good payment history as it shows prospective lenders that you are able to meet your financial commitments.
However, if you do set up direct debit then you need to ensure that you always have enough funds to be withdrawn, as any dishonored direct debits will reflect poorly on you.
Good credit health will help you by saving you money in the long run, through access to better interest rates and better financial products to suit your needs.
For more information about fixing your credit or to talk about how we can help you move ahead with your loans, contact The Loan Panel today!