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How to repair bad credit rating

Credit cards with bad credit rating often cause financial distress, and they often search for credit cards for people with bad credit rating. They are attracted to advertisements that promise ‘no credit check credit cards’.

People with bad credit rating are sometimes disadvantaged because they are continuously declined for regular home loans, personal loans, car loans, credit cards and even phone contracts.

However, even if you are somehow approved it is likely that you will be paying extra in interest rate payments and other charges.

There are many reasons people choose to repair their credit. Some of these reasons include:
1. Getting instant approval
2. Reducing interest rates on current loans and credit cards
3. Getting lower interest rates on new loans and credit cards
4. Reducing upfront and ongoing fees
5. Reducing repayments
6. Saving thousands of dollars a year in unnecessary payments
7. Improving the accuracy of your personal information

A bad credit rating can cost you a great deal. Lenders will deny you financing, or worse, charge you high interest rates on loans.

You may have to pay deposits in order to secure a mobile phone or have utilities turned on.

Sometimes, clients face unfavourable rates and terms on new loan agreements.

Fortunately, you can take steps to repair your bad credit rating and get your credit file back on track.

With bad credit your financial options are not completely gone but they may well be greatly reduced. To the average lender, a consumer with bad credit is a credit risk.

It may seem daunting, and not a task you want to face, but you can fix your bad credit rating.

Here are some tips to help you get out of trouble.

• Evaluate the entire file to determine what is damaging your credit report. Identify problem accounts for further examination.

• Some lenders may be willing to erase the black marks on your credit report in exchange for repayment in full. Always ask the lender to do this before paying off the debt.

• Highlight any inaccurate, incorrect, or erroneous information. You must immediately contact the credit provider (lender) to inform them of the discrepancy.

• Work with lenders when times are tough. If you are unable to make your monthly payments, talk to the lender.

Your bad credit will never get better if you have serious infringements and default payments still outstanding. Take steps to pay the debt off, or visit a debt counselor or we can arrange a meeting for you with a deft counselor negotiate your debt.

If you take steps to clear the debt and fix your record you are on the road to fixing your credit.

Bad credit limits your borrowing options greatly. In the Australian marketplace there are thousands of lending products that you are open to using if you have good credit.

If you have a better credit rating you will receive better conditions of lending and interest rates. If you have bad credit you eliminate 90% of products immediately as most lenders do not want to lend to someone who is a credit risk.

There are lenders who specialise in lending to people with poor credit. Research these lenders thoroughly or call ESMA Credit Repair Specialist as the terms of lending may put you in a worse position as interest rates are often higher and terms of repayment may be at the limit of your serviceability.

Before you take any steps get a copy of your credit report. Look at it carefully to see if there are any listings which may not be yours.

Your credit report may contain incorrect information. For example a credit reporting agency may not realize there is a person with an identical name living in your apartment block and their credit information has been placed on your credit report.

Incidents like this are the reason approximately 1 in 4 credit reports have errors of some description.

If the error is as basic as a misspelt name it may have implications on the rest of your report as there may be black marks which have been incorrectly assigned to you. You have the right to challenge these errors as they may be affecting your credit rating even though the problem is not yours. This is the quickest way to fix your credit report and help your credit rating.

Being in this industry I have seen credit cards major contributors in establishing bad credit. Missed payments reflect badly on your credit report. Most Australians who pay off their debt end up accumulating the same debt again within a year.

Some credit cards, especially store cards, carry very high interest rates. This can get you into real trouble if you are not disciplined.

Take a very disciplined approach towards these cards if you want to repair your credit. As some infringements take two or more years to be removed from your credit report you do not want to increase your chances of creating another infringement and starting the whole process again.

If you are in debt or have a bad credit rating and want to know more about the solutions available to you contact us on (Australia) 1300793757 02 86778721 or 0414959671 or visit us at Parramatta or West Pennant Hills office.

Sukhwinder Rajput is a director of ESMA Home Loans. This article is for reading purpose only. ESMA Home Loans, author or The Global Indian magazine does not take any guarantee of any kind for any process. Readers are advised to seek own expert financial advice.