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What happens if I've got a bad credit history?

Having a bad credit score or credit history is not the end of the world. In an earlier post I reviewed an article and suggested that banks prefer slow methodical waltzes over flamenco dancing- they like a steady and planned approach to money, not a wild or erratic-looking approach. It scares them if they think a borrower mightn't have a solid approach to their managing their money.

I suggest that you need to be on the look out things like the following:

  • Taking a car for a test drive - you can ask them not to do a check.

  • Accessing one of those 'what is the cheapest credit card' calculators - do a ring around and ask. Just keep a pen and paper handy.

  • Filling out an enquiry form for an online lender - come and chat to us first.

  • Purchasing using an interest free offer - be careful of these as they can get out of hand quickly. Set up a plan to pay them off before the interest free period finishes.

  • Buying a mobile phone on a plan - one of the easier ones to explain.

  • Applying for a personal loan - come and see us for car or other asset loans.

Of course there are times when these are appropriate but be aware of them if they're not within a planned approach to your finances. In a news.com.au article earlier in December written by Julia Corderoy quotes Luke Keller of getcreditscore.com.au saying that 'the shopping around approach...is one of the minor offences and the best way to fix it is over time'.

Time is a great healer of credit scores. Enquiries should start to clean up after a few months of inactivity according to the above mentioned article although Corderoy notes that any defaults (for example a bill that wasn't paid) will take more time and effort but is still possible.

Being in arrears for any utilities like gas or electricity can also add to your score so if paying bills on time is getting a little tricky- set up direct debits so that you can relax. Keep an eye on your rates and set up a direct debit for them too. Rates must be up to date if you are looking for a new loan or to refinance one.

Having a bad credit history isn't the end of the world but it may mean a more planned effort to buying your first home or refinancing out of a difficult situation. This is where Brokers excel. I can work with you to find a lender that will take on any debts and help you create a plan to stay ahead of your finances.

Even my debt consolidation services are free. Call my office and set up an appointment and we can chat.

Check out the original article here