How Do I Know if I Have Bad Credit? Everything You Need to Know About Positive Credit Reporting

how do I know if I have bad credit

So you might be wondering, “Do I have bad credit?” Well, if you’ve never checked your credit score then – yes, maybe. Yet before you get ahead of yourself, you should definitely check! Each year, everyone qualifies for one free annual credit report which can be easily accessed online. It’s always worth taking advantage of this freebie because a bad credit rating can stand in the way of you accessing finance.

In a nutshell, your credit score gives the lenders an indication of whether lending to you is a high, medium or low risk. They will also review your current relationship with your finances before giving you their decision. So, if you’re wondering “how do I know if I have a bad credit rating?” we’re here to help! In this article, we’ll take you through everything you need to know about credit ratings and loans for people with bad credit.

What is a credit report?

Basically, your credit report is a record of credit you have applied for, any defaults against you, any serious infringements that are held on public record.

Every time you apply for credit, an enquiry is recorded on your credit report.

Your credit score/report shows things like:

  1. Whether you make repayments on time
  2. If your credit cards are maxed out all the time
  3. Any missed or defaulted on payments
  4. Any failed to make repayments
  5. If you have any serious credit infringements etc.

How do I find out about my credit report?

There are three companies who hold reports on your credit, depending on which company your debtor has listed your infringement or entry with will depend on which company you will need to contact.

You may be unlucky and need reports from all three companies.

Where do I go to apply for my credit report?

You can go to any of the above companies and apply for your free credit report. However, if you require your report in a hurry or the next day then you will be required to pay a fee for speedy delivery. If you don’t mind waiting for your report will usually get to you within around 10 working days.

What if I disagree with my credit report?

If you believe you have been a victim of fraud or that you credit report is incorrect you can apply to have the report changed.

However this is a difficult process and we would recommend speaking with the company who listed/entered a default or infringements on your credit report.

If that is not a possibility then there are many credit repair companies that can help improve or fix your credit rating, be aware however there are fees involved and you should get a written quote from the company before proceeding with any action.

There are a few reasons why you may find incorrect entries on your credit report. Some of these may include:

  • False information
  • Incorrect information in legitimate entries
  • Duplicate entries
  • Other people’s entry’s (due to similar or identical names)
  • Identity fraud or theft

How do I fix my credit report?

To change or fix your credit report you will need proof that the entries are incorrect or false. You can either provide this yourself or enlist the help of a credit repair company to investigate on your behalf.

These companies also offer memberships which allow you access to your credit rating at any time so as you can keep an eye on any potential identity theft or fraud being used against your name.

Keeping an eye on your credit report and ensuring it is a financially healthy representation of your debt repayments and timely payment of bills etc. is a good way to ensure you do not become the victim of identity fraud/theft.

Knowing how lenders see you is one of the smartest things you could do before you apply for a loan. So buying a membership to have access to your credit report can be a big advantage as you can fix problems before you apply for a loan.

A negative credit report can affect your ability to purchase a house, credit cards or most forms of credit.

What is positive credit reporting?

Positive credit reporting is a relatively new feature to your credit report. It is additional information on your credit report for people demonstrating good credit behaviour. So, your credit report will now be able to reflect early or on-time payment history of credit accounts, home loans, cards and personal loans in their file.

How do you ensure you get a positive credit report?

If you have slipped up in the past, unfortunately, it will stay on your record for some time. It is therefore your responsibility to take extra care when dealing with your credit. To ensure you have a positive credit report you should:

  • Consistently pay your bills on time.
  • Try not to switch credit lenders too often.
  • Notify lenders of any changes regarding your personal information.
  • Only apply for credit when you really need it.

What is a bad credit rating?

Credit is rated commonly rated on a scale of 0 – 1000. Bad credit rating is anything from 0 – 500. Don’t worry if your credit score fits into that bracket. You might just be starting out with your first loan or trying to improve your rating. With patience and consistency, over time, you’ll see your score will start to improve.

What is a bad credit loan?

Each lender has their own protocol for bad credit personal loans. Bad credit loans can be used for any purpose, such as medical procedures, car repairs or home repairs. It’s worth knowing that the amount of money you can borrow with bad credit will differ from lender to lender.

Are there small loans for people with bad credit?

These are usually loans offered with a value from $300 to $2000. They can often be unsecured, which means that you don’t usually need to attach them to any of your equity, such as your car or motorbike to your loan. Small loans can be a great option when you need to pay for unexpected bills.

Will there be employment checks?

It’s important to state the truth about your employment status and history in your application. If you make a mistake, you can notify the lender. However, if you mislead information on your application, you could end up facing consequences. Your information may be cross-checked with your references.

How much do short term bad credit loans cost?

Small loans are helping people across Australia every day to get their finances back on track. Interest and fees are highly regulated by ASIC, the National Consumer Credit Protection Act sets limitations on the fees that can be put on short term loans.

Loan companies are required to lend money responsibly and therefore, you should expect to be respected when making your repayments.

What to take away from this

In conclusion, if you are unable to change or fix your credit rating then you may have to wait out the allotted time for the entry to be removed if it is a significant infringement. However, if you continue to prove you have more positive credit habits than negative then this will definitely increase your chances of getting the best deal possible for your new loan.

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