Do you know what a lender will find when they look at your credit history report?
For many borrowers, it’s not until they apply for a loan that they even lay eyes on this document for the first time. Unfortunately, this is also when many people find out that their credit history is less than perfect.
There are lots of little mistakes you can easily stumble into when you’re not focussing on maintaining a healthy credit record. Don’t despair though – there are also ways to fix them, as long as you’re willing to be a little proactive.
Multiple Applications
Some people cast a very wide net when applying for a home loan. They complete applications with a variety of lenders in the hope that one of them will be approved. This tactic might have been a great idea when you were applying to universities, but it’s the worst possible way to apply for a home loan.
Unfortunately when you apply for a loan and you aren’t successful for any reason, this is noted on your credit record. There may be logical reasons for your application being declined – sometimes it’s as simple as not being a customer of that particular bank.
The problem is, when you have a few of these on your record it can start to appear that you aren’t a very good risk for a lender – since so many other lenders have already said no.
The best way around this is to engage a mortgage broker, who will investigate on your behalf before lodging and application with the most appropriate lender for your personal circumstances.
Digging your heels in
Let’s face it – there are some companies out there who are just shocking to deal with. If you spend a lot of time on the phone arguing over incorrect bills, you’re not alone. After lots of phone calls, it might seem like a good idea to ignore that incorrect phone bill and hope that it goes away.
The problem with that approach – the bill might be listed as a default on your permanent record. For your own best interests, it’s probably better to pay the bill, and then dispute it afterwards.
Not keeping on top of your bills
If you have moved house a couple of times, or if you don’t have the best filing systems in place, it’s possible that you might have misplaced or neglected to pay the occasional bill. Sometimes people have defaults listed on their credit history report due to moving house, and not receiving any bills or reminders relating to the debt.
Make sure that you have proper mail redirections in place when you move, and make a list of companies to update your details with as soon as possible.
If you have these sorts of defaults on your credit history report, you might be able to have them removed by communicating directly with the company who reported the default.
Failing this, you might be able to lodge a dispute through a credit reporting body such as Veda.