Surprisingly, there are few people who know the state of their credit file or how to go about checking it. However it is something that is good to be across and better yet, good to know how to clean up if it is a bit of a mess.

What is your Credit File?

Institutions and companies such as banks, lenders, phone companies and utility providers share consumers’ financial information with one another, and this is held in a database called a Credit Report. If you have ever applied for credit, a phone contract, or any other form of finance this will be included on your Credit Report.

In your Credit Report there is a number that banks reference when approving a loan called a Credit Score and the higher the number, the better the score.

Why should you know your Credit Score?

Unfortunately, it could be one simple oversight that can cause a person’s credit score to plummet even if it was unintentional. Some things that may cause a payment to slip through the cracks and effect your credit score could be:

Moving address and not forwarding mail

Switching Banks

Changing phone numbers

Changing email addresses

Changing jobs

Simply forgetting

Some blemishes on a Credit File can be there for years and will affect further applications for credit so being on top of what your credit report says is highly advisable.

How to keep a Clean Credit File

Monitor it regularly

It is easy to request a copy of your credit report from one of the major credit bureaus in Australia such as Experion, Illion or Equifax and then you can easily identify any areas of concern or errors.

Dispute Wrong Information

If you do uncover any discrepancies or inaccuracies, you are able to contact the reporting agency and request your file be corrected. It is imperative that, however, that you provide the necessary supporting documentation to back up your claim. If need be, you can get assistance from an agency that specialises in assisting people clear blemishes on their credit file.

Pay Your Bills Promptly

Overdue or outstanding debts can be a problem for your credit file. If remembering to pay your bills can be problematic for you, set up direct debits or reminders to ensure they are attended to on time so as to demonstrate financial responsibility to prospective lenders.

Use Credit Carefully

It is imperative to use your credit facilities responsibly and be mindful of not consistently maxing out limits. It is also useful to consider the notion that just because you can get a credit facility, such as a credit card, it doesn’t mean you should have it.

Consolidate debts

Rolling various debts into a single lower interest loan can not only simplify your finances but provide you with a lower monthly repayment. This streamlining of your position will also help in maintaining a healthier credit score as well as healthier bank balance.

Bring financially healthy means being plugged into all facets of your finances and that includes your Credit Score. To find out more information about how to get yours, contact the Blackburne Mortgage Broking team.