The Key to Having a More Attractive Credit File & Staying On Top of Your Credit

Keeping consistent with your finances can be tricky. Everyone at some point in their lives is likely to encounter a hurdle or two. You might be in between jobs or recovering from an accident when trouble strikes. As a result, these disruptions can have a lasting impact on your credit history. So, what can you do to prepare for these moments? Nifty could be the lender you look to in an emergency! So, if you’re looking for some quick cash why not call on Nifty.

What is the difference between my credit score and credit file?

Basically, your credit score is a numerical value calculated from the information in your credit file. Credit scores are rated on a scale of 0-1200. Since that’s quite a broad range, the table below illustrates what your credit score means:

  • Bad 0 – 509
  • Average 510 – 621
  • Good 622 – 725
  • Very good 726 – 832
  • Excellent 833 – 1200

On the other hand, a credit file is a report designed to summarise your credit history, which includes your repayment history as well as overdue debts.

Where can I find my credit file report?

Each year, you’re entitled to a free copy of your credit file report. Your personal report can be used to see what lenders and other providers like telephone and gas companies check when you make an application. So, what are you waiting for? Visit one of 3 nationwide credit report companies listed below to get started:

Is everyone eligible for a free credit file report?

No. You can only receive a copy of your report if you’ve been declined from a credit application within the last 90 days. Alternatively, you can also obtain a free copy if you have submitted a correction request and have been informed that information on your file has been altered. However, remember you can only request one free copy of your credit report every 12 months.

You might require a credit report more than once in a year. In this case, once you’ve received your free annual credit report, you can apply for more. You have the choice of ordering all of your reports at once, or you can order them one at a time. By requesting them separately you can monitor your credit through the year.

You will usually receive your credit report within one business working day, provided you are able to verify your identity.

What can I expect to find in my credit report?

Your credit report will be unique to you. It will collate your Australian credit history into a profile that can be used by you and your financial providers during your applications. Expect to find information on the following:

  • Personal information
  • Repayment history
  • Current debt or defaults
  • Commercial loans
  • Personal loans

Why your credit file history matters

Above all, banks and other financial providers judge their risk in letting you borrow their money by looking at your credit file. It’s not uncommon for there to come a time in your life where might you need to take out a loan. So, in certain cases, you may have not been given a credit score yet. This could be because you’re still relatively young, or because you haven’t needed any credit cards or loans. Not having a credit score does make things a bit more complicated, but by no means does it make it impossible.

How to avoid defaults on your credit file?

A default on your credit file can cause a big knock to your credit score. A default occurs when you have an outstanding debt that you fail to pay within 60 days of their due date. These debts must be worth at least $150 and are commonly utility or telephone bills.

What is a serious credit infringement?

A serious credit infringement occurs when you have an overdue debt to a credit provider but have left or appear to have left their last known address, without paying the debt or informing the credit provider with a forwarding address. If this occurs, you will have 6 months to pay off the debt before it will be included in your credit file which can lead to serious issues when applying for loans in the future.

How long do defaults stay on my credit file?

How long defaults stay on your credit file depends on what you have done and the severity of the issue. Consequently, they can stay on your account for up to 6 years from the date of the default.

A serious credit infringement can remain on your credit file for a varying amount of time depending on what the infringement is.

How can I clean these infringements off my record?

Overdue debt is not removed from your credit file just because you have paid your debt. Getting infringements off your credit file before the usual timeframe is difficult, although not impossible. Therefore, you will need to have proof that the default or infringement was listed in error or that the creditor did not make reasonable efforts to contact you. If this is the case they may be forced to remove the credit default. If you are unsure as to whether you want to challenge the creditor on your own you can enlist the help of a credit repair agency.

However, be aware that there will be a charge involved and you should ask for a written quote of costs before you begin. This may be worth the expense to you however if it improves the deal and the possibility of you getting the mortgage and interest rate you are applying for.

There are many companies who offer financial counselling to help you clean up your credit file but it is recommended that you get a written quote first and read the fine print on what their services do and don’t include.

Five ways to improve your credit file:

  • Identify the issues stated in your credit report;
  • Consistently start repaying your debts;Remove any incorrect or duplicate listings from your credit file;
  • Negotiate with lenders on a repayment plan that suits you;
  • Consider getting some help from a financial counselor;

How long does it take to improve my credit report?

Credit inquiries can stay on your credit file for a long period of time, so if you are going to apply for a loan ensure you put your best foot forward and your application is an excellent representation of your financial situation.

If one institution knocks you back the next bank you apply through will be asking why and you may not get the best deal. So, check out our blog on ‘how do I know if I have bad credit?’ to learn more.

What now?

In conclusion, the best way to improve defaults on your credit file would be to ensure you pay your bills on time, try not to switch lenders too often, always notify lenders of a change of address, research when looking for a new loan and only apply for credit when you need it.

Nifty’s got the details you need to know on low interest loans!

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Nifty has the low down on positive credit reporting!