Bad Credit Report. What does it mean?
There is no such thing as a black list. It means that there are negative data on your credit report that is hosted at a Credit Bureau. This negative data can be anything, from a plain collection on one of your loans right through Judgment data or even Debt review.
This negative data will have an impact on your ability to get loans or open retail accounts as the credit provider will see this negative behaviour towards your current credit as a potential way that you will handle their loan; if granted.
When you have any defaults on any of your current debt obligations or legal action listings that the credit provider took as a result of your negative behaviour towards your repayment arrangement, you will have a difficult time when you apply for a loan. This is merely because this behaviour will reduce your credit bureau score and indicate that the risk is too high for a potential default when the credit repayment is due.
You thus need to improve this negative credit standing in the credit granting industry if you want to be eligible for a loan that you apply for.
- Here are some tips on how you can improve your credit standing:
Pay up all outstanding credit in full (settlement) and close the account.
- Pay up the arrears on the account and make regular payments thereafter of the full instalment amount on or before the due date.
- Dispute data that should not reflect on your credit report, like closed accounts and paid-up loans at a Credit Bureau.
These solutions are easier said than done, right? You might not have the funds to settle full outstanding debts or pay up the arrears on the accounts that you have been defaulting on. You might be scared that the Credit Bureau will use terms that you are not used to and these disputes will take time.
MaxLaw Credit Legal has the perfect service offer for you to assist you throughout this whole process and advise you, making arrangements on your behalf and safeguarding you against the constant calls from collection companies. Each individual is unique and so is their credit standing. We believe that your service offer should also be as unique as you. Leave your details and we will contact you with your offer.
What is Credit Bureau Score and how does it impact me?
Your Credit Bureau Score will determine what type of risk a credit provider takes by granting a loan to you. The score is calculated by looking at the information on your credit report to determine if you would repay your loan that you are applying for. This probability is based on your past handling of accounts, defaults and Judgments on your name.
The more negative the information on your credit report, the lower your credit bureau score will be and the higher the risk of doing business with you. The less negative information there is on your credit report, the higher your credit bureau score will be and thus, the lower the risk of doing business with you.
If you are a low risk consumer, you will not have problems with getting your loan as credit providers will be confident that they will get their instalment payments when they are due.
If you are a high risk consumer, you might struggle to get loans granted to you. This is due to some credit providers that are just not willing to take the chance of you not making instalment payments when they are due. The credit provider thus sees you as a potential defaulting client that they will need to list at a credit bureau or take legal action against, if you should default on the repayment amount. The impact that a high risk status will have on you when you do get a loan, includes:
- Higher interest rates will be charged – You will thus repay more on your loan than a low risk borrower would.
- Reduced repayment terms – You might be offered a smaller loan and shorter loan period to test if you are going to make regular repayments on you loan instalment.
- Smaller loans – The credit provider might be willing to grant you a smaller amount than what you applied for. They are thus willing to take a risk on a smaller loan amount to test if you are repaying on the agreed times and amounts.
None of these are guaranteed – not even that you will get loans that you apply for when your status is a high risk. If you thus find yourself that your credit bureau score is too low and you are thus seen as a high risk borrower, then you need to put things in place that will decrease your risk. Here are some tips to assist you:
- Make sure that accounts and loans that are paid up and closed reflect as such or are removed from your credit report.
- Pay arrears on all accounts as soon as possible.
- Apply for a consolidation loan and settle all your accounts outstanding to have only one instalment amount to pay monthly.
MaxLaw can assist you on your journey to improve your credit standing and rating with specially designed products that will support and guide you to a lower risk and interest rate offers. Leave your details and a MaxLaw qualified agent will contact you with a roadmap on credit score improvement.
What do Credit Bureaus do?
Contrary to believe; Credit Bureaus do not hand over consumers to collectors or “Blacklist” consumers.
Credit Bureaus merely host the data that the credit providers submit in a central place.
When you thus apply for a loan, the credit provider will update your identifying information and Header information at the Credit Bureau. As soon as you are granted a loan by that credit provider, they will register the loan against your name and all the details of the specific loan will display on your credit report.
When you make any payments towards the loan, as per the agreement between you and the credit provider, then the payment notification will be submitted to the Credit Bureau and your credit report will be updated with the relevant information. This information is seen as a positive data sets.
However, the negative data is also submitted to the Credit Bureau by the credit provider. This data set include any information where you as a consumer did not make regular payments on your outstanding loan. The negative data set will also indicate any further action taken by the credit provider to collect outstanding monies on your accounts. This includes the data of collection companies that are trying to collect instalments from you as well as any legal action, like a Judgment, that was granted against you.
MaxLaw has a good standing with all the major Credit Bureaus. Through our product offer, we can successfully assist you to get negative data, which should not reflect, removed from your credit record. Contact us today to assist you.
What data is hosted by the Credit Bureau?
Credit Bureaus can host various data sets, including:
- Identifying information (Name, Surname, ID number, etc.)
- Header information (Addresses & Telephone numbers, etc.)
- Public Domain information (Judgments, Administration orders and Debt review listings)
- Loans registered against your name (Credit provider name and contact details, as well as the loan amount, instalment and total balance)
- Negative information (Collections, defaults and other poor payment behaviour)
- Positive Information (Payment obligations that you honoured – on time and full payments paid)
- Educational information (Qualifications achieved)
- Employment information (Employer, position at the company, salary frequency, etc.)
- Fraud alerts (whether you are the culprit or the victim)