Your chances of being approved for a loan come down to how your credit history appears to a financier. They want to know you’re reliable and will be able to make your loan repayments.
There are a few things you can do to make sure you maintain a good credit history;
Pay your bills on time
It can be hard to keep track of all your finances and the bills needing to be paid, however, forgetting to pay bills can do damage to your credit history. Usually, after 30 days of no payment, a credit bureau is notified and this affects your credit history. It may be something as simple as a phone bill referred to debt collectors. If you have a tendency to forget about your bills, set these up to be automatically drawn from your account to ensure you never miss a payment.
Update your contact details
When you change any of your contact details you should immediately notify all your credit providers and services you have accounts with. If you move and forget to update your address with your credit providers it could lead to debt collectors becoming involved as credit providers have difficulty getting in contact with you. This can get quite serious and adversely affect your credit history.
Check your credit file
You should check your credit file at least once a year to confirm all the information is correct and up to date. This also helps ensure that no one uses your identity to obtain credit or commit an identity crime, as you can check that your credit file hasn’t be accessed without your authority.
Do your homework before applying for credit
Every time you submit an application for credit, the credit provider will review your credit file and a credit enquiry is noted to show you made an application with them. Making a number of applications for credit within a short space of time can adversely affect your prospect of credit – it makes you seem less attractive to credit providers. Find out more about why you should avoid a busy credit history.
If you think there’s something on your credit file that shouldn’t be there, don’t hesitate to question it. There are formal processes in place with all credit bureaus and credit providers to deal with situations like this.
Notify credit providers if you have issues
If something unexpected has come up and you are having difficulty meeting your obligations to your credit providers, it is best to contact your credit providers and adverse them. Credit providers are just looking to minimise their potential risk, so by keeping them updated and working with them, they are less likely to take action that could adversely affect your credit history.
Information contained in a credit history include;
- Personal details: Name, date of birth, current and past addresses, employment history and driver’s licence number.
- Credit history: Listings of any credit or loans applied for, defaults and any other credit infringements.
- Repayment history: Dates that credit payments were due, whether or not payments were made by the due date, which dates you missed any payments.
- Other information: Bankruptcies (for up to seven years after they occurred), court judgments, debt agreements and personal insolvency agreements.
If you’re looking to buy a new car and you’re happy with your credit history, talk to us at Aussie Car Loans. We have access to a variety of finance providers so we can come up with a finance solution to suit your situation.
Feature image by Frankie Leon on Flickr.