Repairing your credit score can be a challenging process. It doesn’t help that financial literacy is declining in Australia, and you may not have received the resources or education you need to be sufficiently informed. Thankfully, the mistakes that are often made in credit repair are actually pretty easy to avoid once you’re aware of them. By educating yourself on credit repair processes and financial health, you can get yourself on track to achieve a good credit score and, as always, with the help of Credit Repair Solicitors
1. Failing to Check Your Credit Report
When attempting credit repair, some people prefer to blindly improve their finances wherever they can. While this strategy isn’t harmful, it also isn’t overly effective. The first step in credit repair should always be to request and obtain your credit report (we can help you with that too). From here, you can see your complete credit history and understand exactly what needs to be done to rectify the issue.
The next stage in the process is to carefully go through the report and find any information you think might be false or inaccurate. Once all errors are fixed, you can focus on improving your financial health.
2. Disputing Everything on Your Credit Report
While it is important to check your credit report for errors, be wary about disputing too many things. Sometimes, people can make the mistake of disputing everything in the hopes that one or two things will stick. The trouble with this method is that it doesn’t look legitimate. If you dispute too many items, the credit bureaus could dismiss your dispute as frivolous. You also run the risk of having everything taken off your credit report. This is a problem because, along with the negative accounts, your credit report will also include positive accounts that will improve your credit score. Removing them could therefore cause your credit score to drop further.
3. Avoiding Credit Education
For you, the credit repair process could involve any number of tasks, from correcting inaccurate information on your credit report to reducing your debt. Whatever your path towards financial health might look like, it’s best to educate yourself as much as possible. It’s important to understand, for example, the penalties for a missed payment, or the optimum conditions for requesting a credit increase. You should also learn how to manage your debt and dispute false information on your reports. Just like anything else, your financial health is something you need to hone and practice over time, and this means educating yourself on the topic.
4. Not Keeping Documentation
Complete and accurate documentation is essential for repairing your credit. For example, if you suspect there is inaccurate information in your credit report, you should be prepared to back up your claim with corresponding paperwork. This paperwork might show, for instance, that you made certain payments on time. Documentation is also necessary to protect your rights as a consumer, and to help you spend within parameters that make sense to you. No matter how cluttered your drawers may feel, it’s a good idea to keep all your paperwork in a safe place.
5. Missing Payments
Prioritising payments can be difficult, and people often make the mistake of skipping payments on one account to focus on another. You should never do this if you can help it because failure to follow repayment schedules will only cause your credit to get worse. If you feel there is a reason as to why you missed your payments, be sure to contact Credit Repair Solicitors to confirm the adverse entries can be removed.
3 Tips for Improving Credit Score
1. Confront the Reality
A great tip for credit repair is to confront and unpack the reality of the situation from the outset. Things will go much smoother if you review your credit report in full and take note of any and all actions that made a positive or negative impact on your credit score. Use this opportunity to observe any patterns that emerge and make efforts to break bad habits. This might look like replanning your budget, reducing your credit limit or avoiding using a credit card for impulse purchases. It can be challenging to confront your flaws but the sooner you do the quicker you can find your way back to financial stability.
2. Reduce Your Existing Debt
High levels of debt can be a huge drain on your credit score. Work on reducing your debt by paying down credit card balances, consolidating debt and negotiating with creditors. You can negotiate with intent to lower interest rates, eliminate late fees or remove the debt for a lump sum payment. Having less debt to worry about will lift a huge weight from your shoulders and help you feel more confident as you continue working on your financial health.
3. Limit New Credit Applications & Use Credit Wisely
Another great tip as you work towards credit repair is to limit new credit applications. Every time you apply for credit, it produces a hard enquiry on your report that can potentially lower your score. To avoid looking like you’re in a bit of a financial blunder, limit credit applications to only when necessary and try to space them out as much as you can. Furthermore, you should avoid maxing out credit cards or using too much of your existing credit. Instead, try keeping credit card balances low and keep use to a minimum. If your credit score has been impacted by the volume of credit enquiries, Credit Repair Solicitors will provide you a no-obligation upfront assessment.
Don’t Be Afraid to Seek Assistance
While there’s nothing wrong with managing credit repair on your own, you shouldn’t be afraid to ask for help if you need it. Credit repair is complicated, time-consuming and overwhelming, especially for someone with little or no experience in the process. Credit repair and restoration services are built to help you handle the ins and outs of credit repair, offering expertise, support and personalised guidance. These services work by disputing negative items on an individual’s and company’s credit reports and helping them to maintain a good score going forward. If this service sounds good to you, reach out to the dedicated team at Credit Repair Solicitors on 1300 004 912 or email at info@crsolicitors.com.au!