I’ve Got a Tarnished Credit History, What Do I Do?

By Jaine on January 30, 2010 In Uncategorized

Just had had your application for a personal loan or credit card declined by your lender? Yikes!

What now?

As part of the investigative process each lender will do a credit check on you to see whether you’re a good credit risk. Whilst there are many other factors involved in the loan application assessment process, one of the things the Banks do first up is to get a credit check done.

If there are any issues or red flags on the credit check, your application can be declined quite quickly.

The most common problem that arises is a hidden default. By this I mean a default that you didn’t know about. This could occur where, for example, you change addresses. Even if you cancel all your utilities and move house thinking everything has been taken care of, it may not necessarily be the case.

It’s not uncommon to discover that there was one final bill to be paid, usually from your phone company, posted to you after you have moved.

If you have not left a forwarding address with them, they cannot contact you and so the bill remains unpaid. If it remains unpaid for three months or more, they will list you on the public record as defaulting on the payment.

You will not find out about this until you make a credit enquiry.

Most banks will take a very dim view of this, and their initial reaction is to decline your application.

You will need to have an extremely good explanation to change the Banks perception, and unless the amount is extremely low, no more than a couple of hundred dollars, this may be difficult.

Most lenders take the view that you are responsible for all of your bills. In the case above, they will claim that it was your responsibility to stay in touch with each of the utility providers to ensure that everything was paid, and that you should also have provided them with your forwarding address.

Even if you pay the bill after you learn of the default, it will remain on your credit record for five years. This is the kind of blot on your copybook that you really can’t afford to have.

So the lesson to be learned here is a simple one, take your financial responsibilities seriously, and make sure that you check and double check that you have paid everything on time every time.

If you don’t, it may come back to bite you when you least expect it.

Richard J Gardner operates the Australian Bank Branches Directory which lists the location of all bank branches. Find the right bank branch and the best banking deals on home loans, credit cards and business lending at http://www.bankbranches.com.au.

Article Source: http://ArticlesMind.com/author/gRichard_J_Gardner

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