I was unemployed for the past 2 years, now am employed and I managed to pay off all my debt that was in arrears. I check my credit report with Transunion, Experian, XDS and Compuscan, and my accounts are updated correctly however the payment profile still reflect all the months I have skipped the payment and the credit score are very low 580 for Transunion, 680 for XDS and 595 for Compuscan . I was advised that the score will improve between 3 to 6 months and I must take a secured loan or credit card so it must boost my score fast. When I apply for credit they decline it due to low credit score.
Can you please advise what steps must I take to improve my score and able to secure a home loan?
Thank you for getting in touch.
Credit bureaus will remove adverse information and judgement listings from a consumer’s credit profile, if the amount owed has been settled and the retention period reached. The retention period for default listings is 12 months. In the same way, retention periods concerning administration and sequestration orders have been reduced to 5 years. Your payment history will remain visible for 24 months. Generally the credit providers and your credit score is calculated on the last 6 month’s payment history. Being patient for a couple of months is your only option. Taking out a small loan and paying that over 6 months will also help to restore your credit score… but be very careful. Just take out a small loan to serve the specific purpose of restoring your credit score.
If you have reached your retention period and the information is still listed we would suggest you firstly dispute your credit listing with the company where you pulled your credit report. If you have a complaint about a specific credit provider you can lodge a complaint with the Credit Ombud. Here is a link to their page explaining the complaint procedure.
Also keep in mind that there are 4 major credit bureaus. TransUnion, Experian, XDS and Compuscan. It can be that some of these other credit bureaus have not yet updated your profile. With regards to the bank: It is a fact that they flag consumers on their internal systems. Mostly the flag remains for 5 years.
Hope this information helps.