Every person who has borrowed money, whether it’s a loan or a mobile phone contract, has a credit history.
Most of us don’t bother to find out what our credit report says, but these days with the ever-increasing risk of identity fraud, ignorance may not be blissful.
Know your credit history
Before applying for any finance or contract, you should obtain a copy of your credit history. This allows you to find out what your rating is and provides you with an opportunity to increase the likelihood of having your application approved.
A free copy of your credit report can be obtained from www.mycreditfile.com.au. It contains information on whether or not you have paid your bills, or defaulted on any loans. Based on the information in your file, banks may choose to increase your interest rate to cover your perceived risk, or may even refuse you credit.
Clear up disputed records
When reviewing your credit report, you may come across some records that you believe are unfairly influencing your credit rating. Whether or not it’s a disputed phone bill or a limit being exceeded, use the opportunity to contact the providers to resolve these issues. It also provides an opportunity to discover attempts at identity theft, in which people have tried (successfully or otherwise) to gain credit in your name.
Knowing the contents of your credit history enables you to address these issues before you apply for finance.
Improve your credit score
If you’ve accessed your credit history and have realised that it’s not as good as it could be, there are measures you can take to improve your credit rating:
- Gain more credit and make repayments on time (good credit outweighs bad).
- Pay more than the minimum payment and make payments before the due date.
- Use credit wisely to improve your rating.
Your credit history is not static, so it’s wise to regularly check your file to make sure that once it’s in order, it stays that way.
If you need help with debt reduction, or improving your credit history, talk to one of our financial advisers.