Give your credit rating a health check
Your credit report contains information about your credit history that’s collected from credit providers, courts and other organisations by companies such as Veda, D&B and Experian, who are Australia’s largest credit reporting agencies.
These records are used if you apply for a credit or loan, and most people who have used credit will have one. They’d used to assess if you can repay a loan, credit card or mortgage and for things like increasing your limit on an existing loan or credit card.
Unless you check your credit report regularly, the first time you may realise that you have a problem with it is when you apply for credit and it’s refused. What you should do then if apply for a copy of your copy from the relevant agency and find out what’s caused the problem.
If you’ve discovered a default on your credit file, don’t despair. A repair may to easier to carry out than you think and you could be on your way to hassle-free credit in the future. Here are a few tips that could help you mend that file and give your credit report a clean bill of health.
Check for mistakes
Credit reports can often contain mistakes that can affect your credit rating such as personal details, mistaken defaults and judgements or incorrect details of credit history. If you believe something has been recorded in error, contact the relevant credit reporting agency who will be able to help you resolve the error. See below for details.
Pay off the debt
Contact your credit provider to negotiate paying off the debt. Debt or bankruptcy recorded on your credit report are the main reasons for a loan or line of credit to be refused and the simplest way to get them removed from your record is to get them paid off. Concentrate on paying off the debt with the highest interest rate first and then move on to those with lower rates. Australian law states that once the debt has been paid, the lender must update the listing on your credit file as soon as is practicable. However, even after you have paid it off, a default payment will stay recorded on your credit file for five years.
Identity crisis?
Sometimes, the first time you find out there’s a problem with your credit score is when you’re rejected for a credit application based on a default on a loan you never knew you had. Take steps to protect your identity like installing anti-virus software or destroying documents that contain personal details that could be used by fraudsters.
Accentuate the positive
You can also add information that the credit reference agencies may not know that could improve your credit rating. Things like getting married or staying with the same employer for over two years could help more lenders consider your application for credit.
Consolidate
Put all your debts into one easy-to-manage consolidation loan and it may just be what you need to pay them off faster. This can often be the best way to make headway when you owe money, and is recommended by many debt advice agencies as the sensible way forward.
Getting in touch with the credit reporting agencies
Here are the main Australian credit reporting agencies to contact to get hold of your report if you think you’ve found an error, or wish to add information:
Veda
Phone: 1300 762 207
D&B
Phone: 1300 734 806
Experian
Phone: 1300 783 684
Blog post originally written for Fair Go Finance and appeared on their website in 2014.
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