Credit Check: What’s in your credit report can hurt you and how to fix it
What’s in your credit report can hurt you. The credit checks you need to do to prevent that from happening now, before you need a loan.
If you are 18 or more years old, getting a credit report on you and your partner well ahead when you have to make a home loan or other credit application can save you a lot of stress and even given you the information and the time that you may need to clear any bad credit defaults that might hurt you chances of getting a loan. Don’t leave it till you want a home loan, car loan or credit card finance. Do it today. Whilst you can get a home loan with bad credit, your credit score will determine the options that you are precluded from. The best mortgage interest rates and the best credit offers are for those with clear credit histories.
credit check
Credit check for any forgotten unpaid bills
Life is getting more hectic my the day and that makes it easy to forget credit obligations that we have left to hang.
Whilst “out of sight out of mind” may be good idea with less important matters, your credit obligations are different. Most credit providers today have automated systems in place to list your default within a predetermined timeframe. They don’t even have to think about it. The problem is that your credit rating can be adversely affected by leaving bills unpaid. By the way a credit provider is not just your bank, but anyone who gives your a product or service where you pay later, like your phone company, your electricity and gas provider, your appliance store or other stores, just to give you a few examples.
A quick credit check list
Here’s a quick list of credit that you may have slipped your mind and may be a good idea to clear up that getting your credit report today will clear up for you.
Over 1,500,000 people have bad credit caused by unpaid bills in Australia. that equates to 10% of the Adult population and the same would apply in the US and the UK. The only way you will be able to find out about these unpaid bills is to obtain a credit report.
Here’s the problem. If you pay the debt off, it becomes a paid default, instead of an unpaid default. [It does not get erased from your credit file]. It is better to have a paid default than an unpaid default, and it is better if that happened 6 months or more before you want the credit, not at the time of the home loan application or other credit application. [You look like you have to be forced into doing the right thing, instead of doing what's right before you have to.
"Catch me if you can attitude" is bad credit rating waiting to happen.
A lot of people that have not paid their bills because they have moved may assume that they don't have to worry about the bills till the creditor sends them a bill at their new address [if they can find them].
Unfortunately this is not the case. It is the debtors responsiblity to pay the bill when due, and to contact the creditor and advise their move and new address to send notices to. This can result in even unpaid judgements listed in the courts, and this is in the public record, and goes on your credit file.
The critical amount of credit defaults
Generally speaking debts less than a total of $400 are unlikely to stop you getting mortgage home credit.
Some lenders may allow multiple credit defaults and over $5,000 in unpaid bills, that would fall into the subprime or non conforming lending category, not most people’s first choice of lender.
I’ve listed below most of the credit problems that I see with people seeking mortgage credit. I have also listed in the best solutions for for each one. Obviously I can’t cover every situation for every single person but this will be helpful.
- Maxed out credit cards. Best credit default solution. Pay the minimum, pay any over due and penalty interest and re-apply for a loan in 30 days.
- Mobile Phone bills.Unpaid phone bills are a common deal stopper for mortgage finance. lost /stolen phones without insurance, broken contracts, changing carriers and not paying out the phone company all can give you a bad credit rating. Solutions include, paying out these bills, use a pre-paid phone.
- Utility bills including water, gas and electricity. Pay the bill when due. If it hasn’t turned up, phone then. Realize that new connections and old billing can be two separate departments. And may not realize you are the same person. Be easy to be found, and have your mail forwarded by the post office. Tell everyone you have credit with that you have moved.
- Parking Fines and traffic infringements. pay promptly. That week if you can. The bad aura that these give you will go once they are paid. Late fees. This is the bad karma coming around. Don’t argue, just pay them.
- Car loan repayments. Make sure you conduct all finance accounts in a credit worthy manner, and banks will want to throw money at you!
- Store accounts. Ensure you pay these on time
- Unpaid judgements. Pay any judgements the day you get notified. Don’t let debts hang over you. They don’t go away.
- Identity theft. The bad credit rating may not be your fault if someone is assuming your identity. Protecting yourself from identity theft is crucial.
A bad credit rating can stay with you for up to seven years. So protect your credit worthiness at all costs. Try to stay calm if you are declined a mortgage because you have a bad credit rating. It is best to get a credit report way ahead of when you need it.
So do a credit check on yourself now and then get a credit report once a year, so you can check if your credit score has been affected in any way,and clear up any mistakes.
Article Author:
Rick Adlam has been helping his clients as a Mortgage Broker since 1996 with Equity Home Loans, and online since 1999 when he started Mr Mortgage. When you want to get the best mortgage at the lowest interest rates possible for your credit rating based on your credit report, we encourage you to talk to your local Mortgage Broker today, or get more advice at Mr Mortgage for your home finance, loan consolidations and bad credit loans now.
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credit check
I’ve listed below most of the credit problems that I see with people seeking mortgage credit. I have also listed in the best solutions for for each one. Obviously I can’t cover every situation for every single person but this will be helpful.
- Maxed out credit cards. Best credit default solution. Pay the minimum, pay any over due and penalty interest and re-apply for a loan in 30 days.
- Mobile Phone bills.Unpaid phone bills are a common deal stopper for mortgage finance. lost /stolen phones without insurance, broken contracts, changing carriers and not paying out the phone company all can give you a bad credit rating. Solutions include, paying out these bills, use a pre-paid phone.
- Utility bills including water, gas and electricity. Pay the bill when due. If it hasn’t turned up, phone then. Realize that new connections and old billing can be two separate departments. And may not realize you are the same person. Be easy to be found, and have your mail forwarded by the post office. Tell everyone you have credit with that you have moved.
- Parking Fines and traffic infringements. pay promptly. That week if you can. The bad aura that these give you will go once they are paid. Late fees. This is the bad karma coming around. Don’t argue, just pay them.
- Car loan repayments. Make sure you conduct all finance accounts in a credit worthy manner, and banks will want to throw money at you!
- Store accounts. Ensure you pay these on time
- Unpaid judgements. Pay any judgements the day you get notified. Don’t let debts hang over you. They don’t go away.
- Identity theft. The bad credit rating may not be your fault if someone is assuming your identity. Protecting yourself from identity theft is crucial.