Are you thinking of undertaking credit score repair? Repairing your credit score is a necessity these days, and it can be quite intimidating if you’ve never done it before since it is quite complex. However, the payoff for this process is well worth the effort. Once you get started, establishing and maintaining an attractive credit score is fairly easy, and will improve your life substantially.
The importance of financial health should not be underestimated, especially when living costs are rising across the board. For Australians, household spending increased by 28% over the course of 2022, and research indicates that 64% of Australians are worried about their financial future. Credit repair has never been more important in Australia to help you build security for your future.
What Is Credit Repair & How Could It Change Your Life?
Credit repair describes the process of improving your credit score. For context, your credit score is a rating that is determined by a variety of factors including your financial history. This rating will be a number between 0 and 1200, with higher scores indicating a better financial history and, furthermore, a better credit history. As a general rule, you should be concerned about your credit score if it is under 500.
You can repair your credit score by reducing negative marks and simultaneously practising healthy money management habits that boost your rating. This process will be well worth your time, as a good credit score means greater financial freedom and security. You will have improved access to higher loans, which will support your ability to do things like buy a house or start a business. If your credit score remains low, you will have difficulty accessing the funds you need to live the life you want.
How Did My Credit Score End Up Like This?
For a long time, only negative borrowing patterns — formed by things like late payments and defaults — could affect your credit score. Recently; however, Australia implemented a scheme called Comprehensive Credit Reporting (CCR), which allows positive borrowing patterns to bring your score back up. Therefore, it is useful to be aware of the factors that negatively and positively impact your credit score, so you can stay on top of them and maintain a healthy rating.
Things that can negatively impact your credit score include a pattern of late payments, and adverse entries such as defaults and bankruptcy. It can also look a bit desperate or concerning when you let too many lenders pull your file, which happens when you apply for a significant amount of loans. Defaulting will also damage your credit score — and this occurs when you fail to pay a loan for so long, debt collection agencies or even the courts are sent to you to collect the lender’s money. There are additionally some forms of debt, such as quick cash loans, that lenders find to be indicators of unattractive borrowing behaviour.
On the other hand, factors that will increase your credit score include paying bills on time, and even just growing older. You might be surprised to learn that having some forms of debt will also be attractive to lenders, as it shows them that you can handle it. This is especially attractive if they are classified as forms of “good debt”, such as credit cards and home loans.
How to Repair Your Credit Score With 3 Easy Techniques
1. Get to Grips With How You Got Here
The first step towards repairing your credit score is to really confront and unpack the situation. Learn what your credit score is, order a credit report and then review that report in full. A credit report will show you your history in detail, including all the actions that have positively and negatively impacted your credit score. These might include missed bill payments, defaults, and/or applications for credit cards.
It’s a good idea to observe what patterns are there and think about how you can break bad habits and stop negative actions from happening again. This might look like avoiding the use of your credit card for impulse purchases, setting up a more thorough budget,or reducing your credit limit. Other useful tips include setting up direct debits for bills so as to avoid missing due dates, and consolidating debts for easier repayment. Real credit repair means not only repairing the damage, but finding practical ways to avoid causing further harm to your rating.
2. Become an Informed Credit User
To prepare yourself for future credit and debt situations, endeavour to become a wiser borrower. This means learning more about your options and shopping around for the best deal. Interest rates can have a huge impact on how much you pay over the life of your loans, so considering every possibility is important. Similarly, consolidating debt into a lower-interest loan can help improve your situation.
You should also take this opportunity to improve your financial literacy. This means building up the skills and learning the concepts that are necessary to maintain financial health. For example, creating and sticking to a budget is an important step towards achieving a consistently good credit score. Start by comparing the money you have coming in with the money you have going out. Record your income, including salary and benefits, and then consider your expenses. Once you know exactly where your money is going, you can figure out if there is any spending you can cut back on.
Having sufficient financial literacy also means being able to use and manage debt responsibly, as well as being able to save for things like education or retirement.
3. Clean Up Your Credit Report
When you go through your credit report, you should keep an eye out for any details that seem a bit off or simply don’t make sense. This is because, as with any piece of paperwork, mistakes can be made in your credit report. These mistakes could be quite simple, such as a debt being recorded twice, but they could nevertheless impact your credit score in a negative way. Certain discrepancies could even be indicative of identity theft.
Don’t be afraid to question inaccurate information and ask for it to be removed from your credit report, as this action could improve your rating. You can do this by yourself or with assistance from a professional service.
When it comes to overdue payments, you should also make sure that you received sufficient correspondence from the creditor about the unpaid debt. It may be possible for you to dispute the debt if you were not properly informed of its existence.
Moving forward, you should continue checking your credit report regularly for errors, inaccuracies, and adverse entries or black marks. At Credit Repair Solicitors, we take our clients, Australia wide, through the credit report repair process.
What to Remember When It Comes to Credit Repair
It is useful to keep a few key things in mind as you begin conducting credit repair. The first thing is to try and be patient — accept that this is a process, but practising healthy financial habits will produce beneficial results. It is also important to choose a credit repair solution that will not exacerbate your debt. When it comes to how much does it cost to do credit repair in Australia, there is no set fee. At Credit Repair Solicitors, we provide these services at a fixed flat fee and only focus on completing the work that is required.
Before you decide on the company you want to work with, do some research and make sure you understand what your obligations are and what they’re promising. Learn about the company, read their terms and conditions, and check out their recent Google reviews. It is crucial to be thorough in this process, as you are putting trust in a service that will be involved in defining your financial future. Furthermore, while you should generally be concerned about a credit score that’s under 600, it is worth noting that different credit reporters use different scoring.
Of course, you do not have to use a credit repair service, and can complete credit repair by yourself. However, this is very difficult to undertake and can cause far more harm then good. Not only may you not be as successful doing it yourself, you may cause further long-term damage to your creditworthiness. A professional service will assure that you are informed of the best course of action every step of the way.
Regardless of how you decide to go about credit repair, the issue is ultimately very fixable. Credit score repair is a process that many people will undertake at some point in their lives. On average, Australian households have $86,000 of debt, and 11% of Australians are $100+ in debt after paying regular monthly expenses. Try to remember this as you go about breaking bad habits and establishing new, healthier ones. Just because you have struggled with debt in the past, does not mean that you are incapable of achieving financial security.
Why You Should Choose Credit Repair Solicitors
If you are looking for a service to assist you with credit repair, consider Credit Repair Solicitors. Our team of experienced lawyers have a great track record and reputation for helping clients achieve their financial goals. We guide our clients through the credit repair process with transparency, understanding and professionalism. We believe in providing clear, upfront advice so that you don’t fall victim to nasty surprises as you get your money in order. We also offer a free, no-obligation credit repair consultation, so you can decide for yourself whether we can help you.
Invest In Your Financial Future Today
Anyone who’s been through it will tell you that the benefits of conducting credit repair are numerous. The sooner you start, the sooner you will enjoy greater financial freedom and opportunities. For an exceptional credit repair service based in Australia, reach out to Credit Repair Solicitors today. We’ll get your finances back on track!