Protecting and improving your credit file

Protecting and Improving your Credit File

A credit file is an extremely important part of your life if you have intentions of progressing financially. A lender will request a credit file check to be done on every client that it assesses for finance. For this reason alone, it is imperative that you protect and improve your credit file.

A credit file is a file that presents information on an applicant’s credit history. A credit file is used by financiers when assessing an application. More information about a credit file can be found at FAQ.

In this article, we are going to discuss protecting and improving your credit file.

Protecting:

A credit file should be protected because it plays a massive role in the world of credit. If you have intentions to establish yourself personally or commercially with property, cars, businesses and/or credit, then it is very important to protect your credit file as it plays a big part in borrowing money. Without the availability of loans it makes it hard to progress and expand in life.

What you can do to protect your credit file:

Credit alert – Veda advantage (Credit reporting agency) can attach an alert feature to your credit file. The alert feature will notify you by e-mail, SMS and phone that somebody has accessed your credit file. This is a good feature that combats you against identity fraud. There have been many cases in the past where an ex-husband will use his ex-wife’s details to take out finance in her name and then never pay the loan back. Unfortunately the wife will face the consequences of an unpaid loan and her credit file will be damaged from it. Credit alert will alert you as soon as an enquiry is made and that will allow you to stop the transaction from taking place.  

If you lose a credit card, drivers license, bank account details on anything of the sort, cancel immediately.

Be very cautious as to who you allow close to your personal information. It might sound crazy however there have been situations where best friends have stolen identification and personal information to take out finance in their friends name.

Be wary as to who you become a guarantor for – make sure if you are going to do it, that it is a close relative or somebody that you trust with your life.

What you can do to improve your credit file:

Improving your credit file is not hard to do at all. Improving your credit file basically comes down to keeping up with your repayments, paying back your loans on time and adhering to all credit commitments that you have agreed upon. At some stage during the life of a loan you might come across tough times that may see you not being able to pay on time etc, if this ever becomes the case we strongly urge you to speak with your lender, which, in most cases, will end up with a rearrangement of your payments to make them more affordable. What you don’t want to do is ignore the lender and stop paying, because that’s when your credit file will begin to become damaged.

If you have past that point, and now have defaults listed on your credit file, it is not all doom and gloom, however, there is some work to be done before a lender will look at a finance application for you. The amount of work needed depends on the severity of your outstanding debts, however there is really only one solution. To improve your credit file, the only solution is to pay back the debts owed through a mutually agreed arrangement with the creditor. If the debts outstanding are too large for an arrangement to be sustainable, then maybe look at some bankruptcy options.

Lenders will look at a finance application case by case when it comes to the applicant having bad credit. In saying this, it is hard to tell someone exactly what their credit file needs to look like before a financier will approve. All that can be said is – start paying your debts off, that is the first step, and then we can work from there.

At Quantum, we have a bad credit car loan division that can provide you with more information about obtaining a bad credit car loan if you have bad credit. Copyright.