10 Things To Avoid To Have A Good Credit Report

Maintaining a good credit score is important for many reasons. It can help you get approved for a mortgage or a car loan, and it can also save you money on interest rates. If you’re looking to keep your credit score in good shape, here are 10 things to avoid.

1) Missing credit card repayments might have a significant influence on your credit score. According to Experian’s 2019 Know Your Score study, if you miss just one credit card payment (even if you never missed any prior), your credit score can drop by 22% (even if you never missed any previous payments). If you pay late, you are considered to have missed a payment. This is recorded on your credit report and remains there for two years.

A default may be recorded on your credit record if you are more than 60 days late on your bill and the payment is greater than $150. Before this, the credit provider must have attempted to collect the debt, which includes notifying you about it and requesting payment. For five years after a default has been recorded, your report will show as being in default.

2) It’s also critical to keep an eye on your phone and electricity costs. Although telcos and utilities can’t tell you how much you owe, they can give information on defaults. You might wish to set up automatic payments to assist you in paying your bills on time. If you want assistance managing your expenditures, try Canstar’s budgeting calculator.

3) If you apply for several credit cards within a short time, this may reduce your credit score. Each time you apply for credit, an inquiry is added to your report. These inquiries remain on your report for five years. Credit cards, loans, and certain “Buy Now, Pay Later” (BNPL) services like Afterpay are all possible applications for credit.

4) It’s also a concern if you’re behind on payments to Afterpay or other BNPL lenders. Most BNPL lenders are able to submit any negative activity on your account (such as missed repayments or defaults) to credit reporting agencies.

5) Applying for a payday loan might also harm your credit score. When assessing your credit score, credit reporting bodies typically look at the kinds of lenders you’ve applied for credit with. There may be various degrees of risk associated with applying for a loan from a payday lender as opposed to a bank.

Payday loans are not suitable for everyone, and many people find themselves regretting their choice after taking out one. Payday lenders may charge a fee of up to 20% of the amount borrowed as an installation charge, as well as a monthly service charge of between 4% and 12% of the amount borrowed. So think carefully before you take out any payday loan; if you need cash quickly, there may be alternative methods to get it.

6) It will be recorded on your credit report each time you take advantage of a balance transfer offer. If you attempt to move your credit card debt around in order to take advantage of numerous balance transfer offers, this can have a negative impact on your credit score. It may be preferable to try to pay off your credit card debt rather than moving it again if you’ve previously transferred it, according to Moneysmart.

7) Judgments against you will be included on your credit report. This can raise suspicions and harm your credit score. Judgments from the court remain on your file for five years after the judgment was made or two years after you were no longer bankrupt (whichever comes later). Filing for bankruptcy may reduce your credit score. This will stay on your record for five years from the date you declared bankruptcy or two years after you ceased being bankrupt (whichever is later).

8) This is something that appears to be minor but can have a big impact on your credit score. Make sure any bills sent to your new address are re-directed by your lenders, phone and utilities so they may be paid. If you fail to pay these charges on time, Equifax warns you might receive a credit infringement or an outstanding debt on your file.

9) When you’re checking your credit report, make sure all of the information (such as your personal details and debts and loans mentioned) is correct. If you believe something is amiss, you can contact your credit provider or the credit reporting body to have it corrected.

10) That is why it’s critical to check your credit report on a regular basis and ensure that the information is correct. You can get a copy of your credit report from Equifax, Experian, and Illion, among other agencies. Once a year, you are entitled to a free copy.

Maintaining a good credit score is important for many reasons. It can help you get approved for a mortgage or a car loan, and it can also save you money on interest rates. So we hope you found this article helpful. Clear Credit Solutions are the credit repair experts, and can help remove negative listings from your credit file. This will improve your overall credit score, and give you a better chance of being approved for finance in the future. If you’re looking to improve your credit score and clear credit, then Clear Credit Solutions can help.