The Importance of Your Credit Report

The importance of a credit report should never be underestimated. After all, when you go to apply for new credit or if you want to restructure your existing finances, there will be nothing which is scrutinized as much as your credit report during the decision making process at the financial institution which you applied to.

So, given that everyone's credit report is their most valuable asset (or their worst nightmare) when it comes time to apply for credit – what are the things that you can do to ensure that you are well prepared, before approaching the bank with the application papers?

Preparing Yourself for a Loan Application

Before applying for a new loan or a new credit card, for example – be sure to look at the following list, and check each thing off as it is completed:

  • Request a copy of your credit report.
  • Review the contents of the report and check for errors.
  • Gather financial documents proving your current financial position.
  • Ask for references from past creditors or business partners.
  • Take along everything which you think is relevant to your financial standing.

Got an acceptance letter from another financial institution, but don’t want to accept that facility until you have checked with another one? Don’t be afraid to take that acceptance letter in with you to prove your case.

Despite what some people might think, banks and financial institutions actually like people to be proactive, and even the slightest hint of effort on your part might actually be rewarded with a more competitive interest rate, or a set of more rewarding terms and conditions.

Contesting Incorrect Entries on Your Credit Report

Another thing which you might be able to do to significantly improve your chances of attaining a better credit report is to conduct your own credit report audit.

Having requested a copy of your report, go through and look at all of the entries which have been made. If you see any that are incorrect or look fraudulent (many people think that they would never be the victim of fraud – but more often than not they will be at some point in their life), file a disputes form with your credit reporting agency, and ask them to investigate for you.

It could be that the negative entry will be taken off for you – giving you a fresh or clean slate to work with.