Is credit repair possible for personal debts ?

As soon as a credit provider has confirmed and listed a default on your credit file, you might start to wonder if perhaps a third party is able to repair your credit. When you have heavy amounts of debt you aren’t repaying, or have declared bankruptcy, or entered into a debt agreement, this will appear on your credit report, and can hinder your chances of having a loan approved. Say for instance, you want to apply for a business loan, or perhaps set up a new electricity account; the lender will review your credit history. Their decision to accept your application will be determined by your credit history, and if you haven’t been making repayments or have a bad history your loan may be rejected.

Whilst it does often seem you have no choice and have to go to shady loan sharks who charge sky high interest rates, it is possible to undertake legitimate credit repair under certain circumstances. There are a number of options you can pursue to begin to repair your credit, increasing your chances of getting the loan you need.

Option1:

Try contacting your credit provider and negotiate paying off your debt. This is the best option, as paying off your debt in full shows you are both responsible and are able to keep to a set budget.

Option2:

Think about consolidating your debt. If you have multiple debts with varying interest rates, it may be best you consolidate your debt into one loan, leaving you with one easy monthly repayment to make.

Option3:

If you are unable to consolidate your debt, it is worth focusing on one debt at a time in order to pay them off. This isn’t to say you stop making minimum repayments on your other debts, just make any extra payments to your highest, or debt with the highest interest rate first. It may also be worth visiting a professional financial and legal counselling company for advice on how to better approach your debts.

Option4:

Sometimes errors happen. You should contact a mediator who will work on your half to have any incorrect entries on your credit report removed.

In Australia, the law states that once the debt is paid off, the lender MUST update the listing on your credit file as soon as possible. But, even if you have paid it all off, any default payment will be kept recorded in the credit file for five years and this forms a section of your credit history.

Another thing you should be mindful of it identity-theft. Often times, when a person finds it for the first time that their identity had been stolen, it is usually when they get rejected with their credit application because of a non-repayment of a loan that they never took out. Make sure you take the necessary steps to help protect your identity such as installing an antivirus software, securing your mailbox and making sure you shred any documents that contain important information.

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