Step 1 – Know your credit rating

Before most organizations will lend you money they will look at your credit rating to assess whether you have a good conduct in paying debts.

An impaired credit rating can increase the cost of lending and or hinder you in gaining further credit. The sort of things that are noted could be having your power cut off; your car repossessed or perhaps have missed payments on credit cards or mortgage. Can also include clear outs. (This is where a lender has tried to make contact by phone & writing without success. As a result they have listed you as a missing borrower)

Obtaining a copy of your credit file can be free if you are prepared to wait 10 days, however for a fee you can have it a whole lot quicker.

Step 2 – Clear up any disputed credit records

If you believe that a company has unfairly listed an overdue notice on your credit file, you should contact them as soon as possible to seek clarification for any incorrect information. This should be amended immediately.

If this is not rectified appropriately you can contact Banking & Financial Services Ombudsman (http://www.bfso.org.au) or the Telecommunications Industry Ombudsman (www.tio.com.au)

Step 3 – Improve your credit rating

Ensure that you are meeting all credit payments on time, so you can demonstrate that you able to make good on your commitments to another prospective lender.

This may be done with the assistance of your bank. They will be able to establish automatic payments to your respective loans.

Step 4 – Get help from Family and friends & locate budgeting tools

See if you can get a partner/friend to check that you are paying your bills on time. There is several good budgeting software options that are available to assist with managing your cash. Financial counselors may also be a reference point (www.afccra.org) for you.

However if you are unable to make it work there are several options which may be available to you through debt mediation or debt agreements. Debt agreements in effect is a form of insolvency. Care needs to be taken when dealing in these areas as fees are payable for the process. It is a good idea to get a few quotes for comparison.