Wednesday, 26 October 2022

Why repair your credit report?

Negative listings on your credit report, such as black marks, can affect almost every aspect of your life -from a getting a loan for a major purchase, like a house, to even getting a mobile phone contract.

Fortunately, you may not have to wait up to 5 years for a negative listing to fall off –you have a legal right to contest any information on your credit report that you think is questionable or unfair. You can either do it yourself or hire an expert to do all the hard work for you.

There are many benefits of completely repairing your credit report, including:

1. Increase your credit score

Your credit score (or credit rating) is a number that is calculated based on the information contained on your credit report. Repairing your credit history could improve your credit score, which may result in a favourable loan application.

2. Increase your chances of loan approval

Any blemishes on your credit history may hinder your chances of getting approved for a loan, as lenders could consider you a ‘bad risk’. A clean credit record could make your application more attractive to lenders, which could result in loan approval.

3. Save on interest

If you have a clean credit record, you may be able to negotiate a lower interest rate with lenders, which could save you a lot of money. For example, if you were quoted a rate of 4% interest on a $400,000 mortgage by a first tier lender, but you are only approved by another lender who offers you a rate of 8%, your monthly repayments would increase from $1,910 to $2,935. That’s an increase of $1,025 per month, or almost $370,000 over 30-year mortgage!

4. Negotiate a better deal with creditors

Creditors may apply different lending criteria depending on your financial circumstances, and having a good credit record could help you build up your case to demonstrate to lenders that they would be taking on a minimal risk by offering you a better deal. This could mean having more flexibility, additional features, a loan term that suits your better, or even saving you the hassle of having to refinance by negotiating a better deal with your current lender.

Having a credit report in good shape could bring a lot of benefits to the table. If you want to repair your credit report, an expert credit restoration company like Credit Repair Australia could help completely remove any black marks and restore your credit report.