Tuesday 11th April 2023

Have a black spot against your credit report? Not to worry

Have a black spot against your credit report? Not to worry

In these times of cost-of-living challenges and higher interest rates for borrowers, many Australians are struggling to make ends meet. People, particularly if they are living beyond their means, can be overwhelmed by their debts, and if they are repaying loans they can find themselves missing monthly repayments. This difficult situation can lead to an individual building a bad credit rating.

But do not despair if you or someone close to you ends up with a poor credit score. Your mortgage broker can help find a solution and get you back on track.

With debt spiralling out of control, particularly from high interest credit cards and home loans, and the cost of living from high inflation, you may need more money to pay it off, but your bad credit rating will make it harder to gain access to the finance you need from traditional banks.

The Solution? One approach is to obtain a debt consolidation loan to clear high interest debts, such as credit cards, and enable you to regain control of your finances. After clearing your debts with a bad credit debt consolidation loan, you could repay your new loan at a lower interest rate.

Debt consolidation loans are also an effective way to reduce monthly outgoings, rolling things into one monthly repayment against your home loan. While they can be very effective in reducing total monthly outgoings, debt consolidation loans need to be looked at with care as the total cost of repaying those debts over such a long term is usually much greater. That’s why it’s important to reach out to a broker if you need assistance. They can help you understand the risks and benefits of debt consolidation and find a solution that works for you. Don’t let bad credit hold you back— get in touch today!