Bad credit can affect anyone. Having bad credit can threaten your financial future, reducing your chances to get credit cards, personal loans, and mortgages. Whenever you agree to have your credit history confirmed, you run the risk of being refused due to bad credit history.
What is Bad Credit?
Bad credit or bad credit rating is the jargon used to describe your credit worthiness. If you have ever applied for a credit card or similar over the last seven years than you will have a credit file detailing their personal details and other information such as:
• credit applications or enquiries
• any current credit accounts
• overdue accounts or defaults (for up to 5 years)
Those who have been credit active in the past seven years, you should have a credit file.
The information on your credit file won't be permanently on your file but updated and deleted after five years for all credit applications and defaults with any major credit infringements and bankruptcies erased after seven years.
What gives you bad credit?
If you aren't particularly disciplined about paying bills on time, you may end up with a default on your credit file. Default credits can occur from various ways such as by exceeded credit card limits, not paying bills on time, had assets like your car repossessed, having utilities cut off, or defaulted on previous loans.
As this information remains on your credit file for several years, you may be limited when you make applications.
Where do you find out about your credit rating?
Credit files can prove to be very helpful for individuals applying for a hefty loan as it provides facts of your credit history, and if you have quality credit then this highly advantageous.
To see a copy of your Credit File you will need to contact Veda Advantage at www.mycreditfile.com.au. Depending on how urgently you need a copy of your credit file, there may be a fee involved.
Once delivered check all the information in your credit file to make sure there are no mistakes. If there are any mistakes on your credit file, you should fix these immediately.
In fact, it is suggested to check your credit file every year as this is what financial institutions will assess your financial practicality on which means you need to make sure that all information is right.
Fixing inaccuracies on your credit report
If you find any errors you should contact the company who recorded that entry and ask them to correct the mistake. If you have moved house you may find accounts that are overdue. There may be accounts that are outstanding or even ones that have been fully paid out but still show as outstanding.
Remember that default entries will remain on your file for 5 years. If you do find a mistake on your credit file, report it immediately. This will be investigated by the credit reporting company. Investigations can be a time consuming process, but make regular checkups to see how it is progressing.
Keeping a good credit file
Keeping a good credit file doesn't have to be hard. You can avoid a bad credit file by:
• Paying all bills on time. On the chance that you don't think you are able to make a payment, alert the company and give a rough date as to when you will be paying.
• Appraise your credit file regularly. Make certain all facts in your credit file are accurate and check over for fraudulent entries. If there are entries you don't recognise, investigate the entries to ensure that your identity hasn't been stolen.
A clear credit file does not mean approval for a loan or credit card. Most companies will have their own criteria that they use in conjunction with a credit file. Ask the company as to the specific reason that you were declined.
Credit card repayments too hard?
For people who are finding it difficult repaying all your, there are options available to help you consolidate debt and creating a way to pay off your credit card debt
One such option is a balance transfer credit card. A balance transfer involves transferring the balance owing on one or more
credit cards to a new credit card. There are a number of special promotions and deals on the market on balance transfers. These deals may include an introductory period where low interest or even zero interest is offered.
Other great money saving tips
There are a number of great money savings tips that you can use to help meet your credit card repayments.
So if you suspect you have bad credit or have been declined a loan or credit card, check out your credit file and find out what the problem is. Credit ratings are the basis for your success in gaining approval for most applications, both personal and business. Ensure that your credit rating is working for you.
