The term “credit report “may sound familiar to you but do you fully understand what it means and what it offers? In today’s volatile economic state it is vital that you understand and check your credit report in order to manage your finances optimally.

In understanding how your credit report can work for you, we decided to firstly clear up of the biggest misconceptions around it:  

1. Only credit providers can gain access to your report:

Fact- You too have access to your credit report and can access it for free, annually. This process, better enables you to assess your financial standing and where it is you may need to make changes in order to improve your credit status. This report will also give you an idea of the information that a creditor or lender looks at when you apply for any credit.

2. Opening a new credit card will lower your credit score:

Fact- While this may temporarily lower your score. In the long run, it is likely to have a positive effect. As the account ages and you are able to manage it, your credit score will improve. In addition, it is a good reflection on you should you have a number of accounts open that you are able to manage well, as this is what lenders look at. This further shows that you are a good payer, and can assist you when you are looking to making big purchases like a home or a car.

3. You can’t dispute information on your credit report:

Fact- Within the National Credit Act (NCA) there is provision made for consumers to dispute any information they may find untrue in their report. To prove your case, you will need to produce both proof of identity and proof of the correct information to the credit bureau.

4. I can be ‘blacklisted’ by a credit bureau:

Fact- Contrary to popular belief credit bureaus do not ‘blacklist’ people. They instead act as an information centre for consumers. They are merely the dispensers of both negative and positive information with regards to your credit history.

The creditors or lenders on the hand are the ones who then take this information and make the decision to ‘’blacklist’ you or not.

5. You can pay someone to repair your score:

Fact-There are quite a few companies out there that “repair credit” but very often they won’t be doing anything different that you can do for yourself. Accurate information can’t be removed from your record.

Debt consolidation offerings could assist you in paying off your debts and so improving your score, but the only way to ‘repair’ your score is to implement better credit management, i.e. pay off your loans.

The more you know and understand about your credit report the better you are able to build and maintain a positive record.

Until next time,
The Team