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Ways to fix bad credit in Perth

Wednesday, 29th Jun 2011
Categories: Finance, Newsletter

Poor Man

Pay your bills on time

It sounds simple, but you should start by paying your current bills on time. I would always recommend paying all your bills on time, however, if you get into a difficult situation, and you have to prioritise your bill payments, I would recommend paying your credit cards first. The credit card companies are the most likely to report any late payments to the credit reporting service. You may find that your local council or your landlord is less likely to report late payments to credit reporting services. Also, do not simply ignore bills and hope they will go away. If you are going to be late, call up the service provider and ask for an extension. This will give you more time to get your act together and pay the bill, and possibly delay any notification to the credit reporting service.

Apply for store cards – but not too many!

If you don’t have much credit history or a poor history, then you should consider getting store cards to establish or re-establish your credit rating. These are often handed out a lot more easily than regular credit cards. Evidence of consistent payment on the cards will help improve your credit rating. You should apply for one or perhaps a few cards only. Even if you have good credit, I wouldn’t recommend having more than a few credit cards. Credit card companies report your applications to the credit reporting service. Therefore, if you apply to ten companies this action will be on your credit report for at least five years. A high number of credit applications may reduce your credit score. Furthermore, conventional credit providers will usually look at the existing credit facilities you have. If you have ten credit cards with a ten thousand dollar limit an each, the financiers will consider this as part of the potential debt when assessing whether to give you a loan.

Get a personal loan

Again, if you don’t have much credit history or a poor credit history, you should also try to get a personal loan from a bank or finance company to establish or re-establish your credit rating. Building societies, credit societies, and finance companies prefer to deal in this area. Go into your local financier and place a deposit of a few thousand dollars. Within a week or so, go back to the financier and tell them that you want a personal loan for a period of twelve months, secured by the deposit you have with them. They will probably wonder why you simply don’t take out the funds you have with them. Simply tell them that you prefer to stick to a regular repayment plan and you don’t want to diminish your saving. If you choose you can also tell them that you are trying to get a better credit rating. The repayment of this loan will be further evidence of an improved credit rating.

The better your credit, the better your chances of getting a loan. No matter what small steps you take, a better credit rating and wider access to credit greatly enhances your wealth generating opportunities.

 

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