We continue from our last article which talked about credit scoring and Credit ratings. It explains what a Credit Score is and how it helps you to save thousands of dollars in interest charges if your credit score or credit worthiness is high.
What is a credit report?
Your Credit Report is a mini database of information about you and the financial activities involving you. The information contains in a credit file includes your name, addresses, credit enquiries, your employment, defaults, court judgments, any alias etc.
Why is a healthy credit report so important in today’s world?
At numerous times, we face a situation where we always do the things the right way but the outcome is not in our favour. An example of that can be a situation where an old phone bill that was sent to the old address due to an error and is now listed on your credit file thereby hampering your prospects of a home or a personal loan.
Whenever you apply for any credit be it over the phone, internet or through a bank, there is every chance that the details are passed and checked with credit reporting agencies for any blemishes.
If there is a default or judgment that is listed on your credit file, then there is a good chance of rejection on securing credit. The defaults or judgments if listed can stay for up to 7 years thereby reducing drastically any chance of getting a loan from any major institution. This will then affect the interest you pay on the loan that you can access in the circumstances where your credit file is hampered.
We take an example from our previous article “your credit score”, the person A with a score of 300 due to a default on the credit file can avail a personal loan at 30% per annum, and similarly the person D can get it at 14.5%. So $25000 loan can cost the two:
Name Score Interest Paid (Over 5 years) Total Amount Paid
Person A 300 $19026 $44026
Person D 900 $10292 $35292
Just fixing your credit rating can save you $8734 as interest charges over 5 years.
Can I fix my credit file by paying regularly?
Unfortunately Australia is one of the countries that follows a “Negative Listing Rule”, that means only negative entries are recorded and not positive ones.
Debt Negotiators consists of a team of consumer advocates which works for and with the consumer to bring justice to the client who find themselves in an unfair situation. We specialise in removing any default that is unfair, disputable or made it to your credit file due to an error.
To obtain a free assessment, quote “fix your credit file” and speak to one of our friendly staff at 1300 351 008.