Lenders this last week have been nitpicking through the most trivial of items due to the introduction of Positive Credit Reporting. I have been asked to explain why someone spent $35 back in June this year as it showed a payment into another bank account (he was repaying a lunch), what was the $100 in July directly into a bank account (a birthday present) and explain the regular payment each month to another bank (insurance!). While it is not the intention of positive credit reporting to look at every transaction in your accounts, anything with just a Bank in the notation may be queried as it may be a loan.
So what can you do to make sure the banks don’t have anything but positive things to see in your application?
- Label all transactions so you remember what they are and then the banks can see what payments are for.
- Close any unused credit facilities including travel credit cards, zip pay or personal loans and keep the closed account letters as proof.
- Make all repayments for credit on time – do not pay late as this bad habit could be used against you in a credit application.
- Always keep your savings accounts in the black – no overdrawing
- If you always run your credit card close to the actual limit you are living beyond your means. Shut the facility down and just pay it off as you can – do not use it again as it is not being used for a rainy day but everyday and can cause poor credit scoring at banks.
- Limit the number of credit facilities you have. Too many can hurt your credit score.
- Stable employment and stable living quarters – banks ask for three years of history. Try to keep to no more than two within each three-year period.
- Keep your drivers licence details up to date with the correct address either on the front or back.
- Keep an eye out for fraudulent activity on your credit file – go to www.mycreditfile.com.au
So how about sharing your BEST ideas for keeping your Positive Credit Report looking positive?