Introduction

You’ve probably heard the age-old saying – prevention is better than cure. We definitely live by this saying at Tippla! But how can you prevent mistakes appearing on your credit report, and avoid having to repair your credit report? We’ve spoken to Chinelle Wardle, the Director of Wardle Consultancy Services Pty Ltd, to find out.

In this lesson, you will learn the following:

• What to do when you apply for any kind of credit;
• What to do if you need to reschedule one of your credit repayments;
• What to do if you experience hardship.

We’ll also take you through some further tips to help prevent mistakes from appearing on your credit report and potentially harming your credit score! So let’s get stuck into it!

How to prevent mistakes on your credit report

1. Applying for credit

Applications for credit are a common place where mistakes are made, either by the creditor you are applying with or by consumers accidentally filling in their personal information incorrectly.

That’s why it’s important to clarify the information on your application before it is submitted. Wardle specifically advises customers to call up the lender they have applied with to ensure they have input your information correctly. Also always ensure you read a credit provider’s privacy consents and disclosures before applying for credit.

2. Changing the repayment date

When we spoke with Wardle, she highlighted that one of the most common reasons that late repayments are incorrectly listed on your credit report is when consumers try to change their repayment date. Although the new repayment date is agreed to by the provider, they can fail to record the variation on their internal system correctly.

Specifically, Wardle explained that she has frequently seen when a customer has come to an agreement with their creditor to delay payment (and a new date has been agreed upon), the missed payment will still be listed as a default on their report, even though an agreement has been made.

In order to combat this, Wardle advises Australians to do the following, “If you receive any notice for a payment and can’t pay by the due date, the first thing you need to do is call the credit provider to organise a new payment date. Ensure that you obtain the reference number of the call. Once you have completed the call, send a confirmation email to your credit provider citing the reference number of the call to confirm the new agreed payment date.”

This, Wardle outlines should prevent incorrect repayment details and defaults from being added to your credit report. It should also prevent debt collection activities from being placed on your account.

3. Proactively update your personal information

Another way you can avoid mistakes on your credit report is by proactively updating your personal information with your creditors. If you move house, get a new phone number or email address, then you should ensure that you update your information with your creditors.

This can prevent outdated information from appearing on your credit report, and reduce the risk of multiple credit reports being generated in your name, which can harm your credit score.

4. What to do if you are in hardship

If you miss a repayment and can’t afford to pay it back, then it can end up as a default on your credit report. If you find yourself in a difficult financial situation, according to Wardle, it is important to be honest with your creditors immediately.

Specifically, Wardle recommends that you contact your creditor as soon as you find yourself in financial hardship and ask to be referred to the hardship team to discuss any payments. This way, you are taken out of the collections team and it can stop your report from being negatively impacted. Wardle also suggests that you request a thorough assessment of your loan account and a confirmation email from the credit provider that your report will not be impacted as the hardship claim is being assessed.

Moral of the story: don’t ignore anything

Being proactive and quick to outline any mistakes or potential issues with your creditor can make all the difference to stop mistakes appearing on your credit report.

If you don’t know how to start the conversation with your creditor, then you can reach out to a financial counsellor to speak on your behalf. You can do this before you reach out to a credit repair firm, which could cost you thousands of dollars to repair your credit score.