What is Bad Credit? And How Can I Fix This?

The label of having ‘bad credit’ can have significant implications on any individual. Bad credit describes one’s inability to keep up with credit arrangements; which often means missing out on paying your credit card bills on time (or not at all in some cases). What are the consequences of this? Consider your lack of financial options; with a bad credit rating, you are seen as a risk to any lender and bank. It is absolutely necessary for anyone with bad credit to improve of fix the credit rating, as this holds your financial details that lenders use to assess their ability to repay debts.

Go through Debtfix’s guide below and see how you can improve your situation. Some people don’t even know they have bad credit, until they are contacted by debt collectors or get refused on securing finance for loans! Here are some tips to get started.

Copy of Your Credit Report

Get a copy of your credit report and do some investigating. Read through it to see if there are any mistakes – it’s quite possible there are listings which may not be yours, and this has been proven in many other cases. If the transactions do belong to you, pay off the existing debts first and clear all the marked debts on your report.

To get your personal copy, you need to contact the registered agencies as advised by ASIC. In Sydney, there are two Credit Reporting Agencies, namely Veda and Experian Credit Report, both located in North Sydney 2060.

Cancel Credit Cards

Missed payments on your credit card bills reflect poorly on your credit report. To overcome this, an effective way is to get rid of your credit cards. Most Australians who pay off their debt end up accumulating the same amount of debt, all in the space of one year! Taking into account that some credit companies carry high interest rates, so this can exacerbate your situation if you have trouble being disciplined with your purchase decisions. Infringements take two years or more to be removed from your credit report; so cut up cards that you do not need, to prevent your chances of continually missing another payment and starting the whole process again!

Bad Credit Refinance

As noted earlier in this article, the notion of having bad credit limits one’s borrowing options greatly. Competition is strong in the Australian marketplace, and there are limitless number of lending products open to consumers with good credit ratings. The better the credit rating, the better options you have in securing a loan with good interest rates. People with bad credit lose up to 90% of the products available, as money lenders tend not to lend to households who can be seen as a credit risk.

Not only that, having records of debt or bankruptcy (such as debt agreements) recorded on an official credit report hampers with the process of being approved for loans or line of credit. For example, if you apply for a car loan with a bank, or set up a gas account with a state supplier, the bank reviews your credit history and their decision will be made based upon the state of your credit file.

How Can DebtFix help you?

Effective credit repair is a specialised service and field. A comprehensive knowledge of the relevant legislation along with experience in communicating with credit providers and industry ombudsman are essential components of reaching a positive result.

There are a few steps you can take to help manage a default, perform credit repair and potentially improve your credit file.

Don’t be petrified about your debt situation! Learn how to fix it. After contact with Debtfix, you’ll feel more in control and reassured you’ve made the right decision with the right company.