Credit File

The average credit file is blotched with late payments, stretched credit limits, and higher debts than ever. So before you apply for your next loan, think about whether lenders will see your file as a shiny example of good credit spending, or just another smudge in the market.

Old credit habits die hard

Every year, Australian credit debts rise steadily to new records, but our bad management and spending habits seem to never change.

However, what most Australians donn't realise is that simple mistakes such as forgetting to pay your bills or over-pushing your credit limits can stain your credit file for years.

Lenders all over the country are then able to judge you based on these slip ups and make decisions that could drastically affect your lifestyle.

For example, being more than 60 days in arrears for debts as low as $100, defaulting on small payments, court judgements, and your record of credit card limits, could all spell out your credit file personality.

Credit file cleaning

Luckily, for every mistake, there's a solution that could mend your credit reputation. For example:

• When your credit card balances reach boiling point, you can apply for balance transfer offers that dramatically reduce your repayments and consolidate your loans into a more manageable sum.
• You have a right to be heard. Comments can be attached to your credit file to explain discrepancies and help lenders resolve misunderstandings.
• Go into lockdown. Put a cap on your spending, and start paying back all of your debt until your credit file has its name cleared.
• Get proactive. If you become the sort of borrower who never misses a payment and never goes beyond your bounds, lenders may consider your changed habits.
• Your credit file is open for inspection today. Simply contact organisations such as Veda Advantage (mycreditfile.com.au) and Dun & Bradstreet (dnb.com.au) to get access to your credit file for free, or take advantage of their paid delivery services.

Everyone deserves a second chance. Don'tlet your credit file become your fear by shopping around for cheaper rates and fees, or a new way of spending that frees you from debt.

The table below lists some of today's best low rate credit cards.