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How to repair a bad credit rating


If financial struggles have left you defaulting on loans, missing repayments, entering into debt agreements or declaring bankruptcy, chances are your credit score is low.  This reduces your chances of approval for a home loan, personal loan or credit card. But with some savvy planning you can start to rebuild your credit rating one step at a time. Here’s how.

1.  Get a copy of your credit report

First things first, you need to get a full overview of your credit situation.  You can access your credit report and credit score for free through websites like finder.com.au, giving you a clear understanding of what’s hurting your current rating.  Also check for any discrepancies as well, because mistakes can happen.

2. Correct any mistakes

If you’ve unearthed mistakes on your file, it’s important you flag these issues with the relevant credit provider immediately. Perhaps you’ve been a victim of fraud or aren’t responsible for one of the debits.  Whatever it is you need, work towards getting it reversed to eliminate further damage down the track.

3.  Take control of your debt

There are numerous options to help you get out of debt, from debt consolidation loans to balance transfer credit cards.  The key is finding what’s right for your current financial situation. It’s important to note that some options, like entering into debt agreements, will have an impact on your current credit rating, so always do your research before signing any contracts. One hack that can’t be faulted is good old-fashioned budgeting, reducing your expenses to put more money into debt repayments.

4. Keep ahead of repayments

Every time you make a debt repayment on schedule, your actions are recorded and fed into your credit file.  The more positive actions you take, the better your score (and vice versa). So keeping ahead of your repayments and making sure you pay them on time can slowly start to improve your score, proving to the powers that be that you’re becoming more financially disciplined.

5. Steer clear of multiple credit applications

As tempting as a line of credit can be, it’s important to know that seeking multiple applications in short periods of time is recorded against your credit score, showing lenders that you’re in financial stress. Budgeting ahead of time and always having a contingency fund can help when an emergency strikes. If you’re really stuck, you may like to consider family or friends before making an official credit application.

6.  Get expert advice

Seeking help from a financial advisor can really help you get on top of your finances and avoid falling into the same habits down the track. If that’s out of reach right now, try contacting the National Debt Helpline on 1800 007 007 to find free financial counseling in your area.


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Our response to limit the spread of COVID-19

  • As COVID-19 continues to spread, we would like to take a moment to let you know what Financial Spectrum is doing to respond.

    While we haven’t been directly affected with any confirmed cases, we are taking all reasonable precautions to remain safe.Our priorities are:

    1. Keep our staff and clients safe
    2. Stay fully operational in our service delivery and continuing to manage your financial affairs
    3. Play our part in minimising the impact on our community against the spread of COVID-19

    Financial Spectrum has the technology, infrastructure and systems to continue business as usual remotely and our staff will now be working from home.

  • You should notice no change to our service, with the exception that we are encouraging our clients to meet via video call, rather than face to face, unless requested. We will be contacting all clients with meetings booked over the next two weeks with instructions for a video call.This is an evolving situation and we will continue to monitor developments. We will keep you informed of any material changes to our approach.

    These are unprecedented times and we understand that many of you will be feeling unsettled about your finances. We would like to assure you that we are open for business and are here to help you. If you don’t have a meeting booked but would like one, or if you have questions, please contact us at info@financialspectrum.com.au or on
    02 8238 0888

Brenton Tong

Managing Director

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