If you’ve ever applied for a loan, had a credit card or even rented equipment such as a fridge or washing machine, you will have a credit file. This is a record of your debtor history and what it contains is important because it’s one of the key pieces of information any lender will take into account when you apply for a loan or credit. Here, we look at how to get information about your credit file and how to improve your credit rating.
Where do you go to find information about your credit file?
Dun & Bradstreet offer a free consumer credit report, available directly from its website. The report is sent via email or post within 10 days, or if the request is urgent the report can be sent within 24 hours for a small fee. To obtain a copy of your credit report visit: www.dnbcreditreport.com.au
What can you do to improve your credit rating?
According to Dun & Bradstreet Australia & New Zealand CEO, Gareth Jones, there are a number of steps you can take to ensure your credit rating is as good as possible.
1. Do a credit check on yourself
A credit check is something financial institutions often do when we apply for a loan, but it’s not something we often think of doing ourselves. Your credit file holds personal information about you as well as details of your loans, any credit applications you have made and details of past and present overdue accounts. Information is held on your account for between four to seven years. A bad credit file can cost you a lot in the long term. If you haven’t paid your bills, or if you’ve had your power cut off, your car repossessed or skipped payments, exceeded card limits or defaulted, you could be refused a loan or be charged a higher interest rate.
“It’s a great idea to check your credit report occasionally, not just to tally up the black marks but also to ensure that there are no errors – and to make sure you haven’t been an unwitting victim of identity fraud,” says Gareth.
2. Clear up any disputed credit records
Your credit report will contain records of overdue payments of 60 days or more when you have been sent a letter notifying you of the default. It also includes records of when a credit provider has unsuccessfully tried to contact you in writing and has reported you as a missing debtor.
According to Gareth, if you believe a bank or phone company has unfairly listed an overdue account on your credit file, you should contact them and ask for an explanation and for the incorrect information to be rectified.
3. Improve your credit
To change a bad credit record into a good one, use credit as much as you can, meeting all repayments on time, so the good record outweighs the bad. You do not have to spend more, just put all your spending (bills, groceries, petrol, transport pre-pay tickets) on a credit card and pay it off every month. You can arrange with your bank to have your card paid automatically from your savings or transaction account.
What can you do if you believe the rating is based on incorrect information?
Most consumers will only access their credit file after a credit application has been rejected.
“We strongly encourage consumers to keep a close eye on their credit report, so that any errors may be spotted and corrected well before an application is made. Continual monitoring of a credit report also raises awareness of any changes, such as negative credit events, which could affect your ability to obtain funds. This can also help negate issues such as identity theft,” says Gareth.
“In this way consumers can understand how they are being portrayed to prospective credit providers and be sure lenders are receiving a complete and balanced view of their credit history,” he adds.
If you spot any discrepancies on your credit file, D&B can make any amendments necessary once documentation supporting the change has been supplied. Once a change has been successfully made, it will also send the amended version to all previous enquirers.
If the information has come from the credit provider, you can go directly to that provider or source supporting documentation.