Despite how important an individual’s credit report may be, the majority of Australians have never checked their report. Not knowing what your credit report holds can lead to paying higher interest rates on credit cards and loan accounts, and can impede your chances of getting an affordable home loan. However, for those who regularly check their credit history and understand their credit score have a greater potential to save money in the long run.
With a consumer-driven dependence on products and services that are offered in the digital landscape, financial institutions are starting to move toward utilizing technology in order to offer traditional banking products, such as credit cards, loans and mortgages. This means that the popularity and success of peer-to-peer lenders which rely heavily on bringing borrowers and lenders (both institutional and individual) together via the Internet is quickly moving into the market. The purpose of these types of lenders is to provide more affordable loans to borrowers, as the risk of default is spread across multiple lenders instead of just one. However, only those who are in good standing as it relates to their credit report and credit score are able to qualify for lower rates. For individuals who have never checked their credit report, low cost loans or mortgages from new peer-to-peer lenders may not be an option.
An individual’s credit report plays an integral role in saving money over the long run. Checking your credit report allows you to know, first, where you stand in terms of your credit history and, second, what may or may not be necessary in order to repair your credit report. When applying for a credit card, personal loan or mortgage, a lender is not going to be lenient with those who have numerous negative marks or gross errors on their credit report. Instead, financing may be declined and an additional negative mark may be added to your credit history. In order to avoid these issues, it is important to know if these negative marks or errors exist prior to applying for any type of financing.
If you do find less then flattering information in your credit report, it is important to know that this can be fixed, although it may take time. Paying down debt on time, consolidating high interest rate debt under a fixed repayment loan and contacting the companies that have erroneously placed information in your file can help reverse the negative marks on your credit file. The first step in saving money, though, is checking your credit report regularly.