We are all very “dependant” on our Credit Ratings in this day and age. Many consumers tend to borrow to fund their lifestyles and then pay it all back in instalments.
We rely on our credit rating to purchase goods & services such as:
– Family home
– Credit Cards
– Personal Loans
– Household items such as White goods, T.V’s and Computers
– Telephone contracts (home & mobile)
– Various investment loans
In many countries, a solid credit rating means more borrowings and enquiries. Here in Australia, it is measured in the longevity of a person’s credit report and that it is not too “Active” ie there have not been too many enquiries within a certain timeframe.
Many people wonder why they have been declined for a credit application when it may only be a small amount like $500. This may be because there have been too many enquiries in the last few months. Try to keep your credit applications to less than 3 within 3 months and you should have no issues.
Many lenders, especially the banks have systems which will automatically decline an application if it detects more than 3 credit enquiries in the last 3 months.
The dreaded “Default”, which can even be for a small amount but can throw our credit ratings “out the window” for years to come.
Always try and pay your bills on time. If you cannot meet your minimum due payment, ring the organization and negotiate a plan to catch up. Lenders prefer communication and to get even a small payment as opposed to NO payment. Remember, the banks & others can now default a person if they are over as little as 1 month late with a repayment, but if you informed them, chances are that you would be ok. They may also do spot checks from time to time to see if your credit rating has changed.
A Default is classified as a black mark on a credit report & lasts for up to 7 years. It is generally marked as ‘paid’ when you have completed paying the debt but will be visible on your file for longer.
If you do need further assistance or help with your current Debt Situation, give Debt Negotiators a call on 1300 351 008 and we can help you to consolidate and pay off these debts with one easy payment or point you in the right direction.