Your credit report is important for your financial future, and the actions you take during tough times (or more important the actions you fail to take) can impact your ability to borrow money or work towards your financial dreams in the future.
The current financial challenges are temporary, but the effect on your credit report can be long term. So here are our tips to avoid going into arrears or having your credit report negatively effected.
Contact your utility companies and service providers to look for a discount or payment plan
If you’re not able to meet your biggest expenses, contact your service providers and ask if there is a better plan on offer. Otherwise, ask to be put on a payment plan for a period of time. To avoid sitting on the phone to each company, we suggest Googling your provider to see if they have options online to discuss their available relief packages.
Some of the providers you could contact include:
- Internet / Telephone Provider
- Council Rates
- School Fees and kids’ sport activities
- Your landlord
Be on the front foot – don’t wait until you fall way behind.
APRA (Australian Prudential Regulation Authority) has confirmed that anyone taking repayment relief from their home loans won’t be treated as arrears (non-payments) which is great news. However we recommend making sure your bank understands your situation and you have spoken to them to arrange the deferral or reduction in payments. Don’t assume that you’re automatically placed within a relief package.
Always keep a record of your conversations
When speaking to your bank or any other service provider to arrange a payment plan or deferral, ask the customer service representative to confirm your conversation in writing. These are busy times and customer service departments are experiencing huge workloads as people call for assistance or advice. In such times, mistakes can easily be made. So make sure you’re recording the time and date of any discussions, and ask for the Customer Service representatives name and a reference number, as well as confirmation in writing. That way, if something is missed, you can provide the appropriate evidence.
Check your credit file regularly
In the age of direct debits and automatic payments, it’s easy to lose track of all of the payments you should be making – but missed payments can have a dire effect on your credit report and on your ability to borrow money in the future. You can get updates on your credit report by going to https://www.equifax.com.au/personal/products/my-credit-file where you can subscribe (for a yearly fee) to get notifications of any changes to your record.
Don’t wait until you’re in financial trouble – get on the front foot and contact your service providers before you miss payments, so that you can protect your long-term financial opportunities. If you need help, don’t hesitate to contact our team.