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Date Published : Thursday, June 12, 2008
Financial experts have said the party is over for "free and easy" credit lending - meaning it is becoming increasingly important to make sure your credit record is in order.
Credit records are a report complied by a credit bureau that lists personal details such as address and employment history, as well as details of the number of credit accounts they have applied for, are past-due or remain in good standing.
Dun & Bradstreet (D&B), an agency that offers credit checking services for Australian consumers, told news.com.au that this report is checked by lenders every time a person applies for credit such as a personal loan or credit card.
With lenders becoming more cautious about who they let near their money, having a bad credit history will make it "all but impossible" to obtain mainstream credit, the site warns.
However, there are a number of steps consumers can take to ensure their report does not prevent them from borrowing.
Perhaps the most important step is ensuring they do not miss bill or loan repayments. According to D&B, missed payments can take up to five years to clear from a credit history and paying off the debt after the fact will not speed that up.
If consumers think they might miss a repayment, it is important to get in touch with the relevant lender beforehand, as they may be able to offer a solution such as loan restructuring.
In addition to making their own payments, consumers should also safeguard themselves from becoming responsible for the debts of others. For example, people who live in a shared house but have their name on a phone or utility bill will be held accountable for any debts incurred, regardless of whether or not they paid their share.
Experts also recommend getting hold of a copy of their credit report to check it for any inaccuracies.
Compare credit cards.
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