Importance of a Credit Report and Reasons to Seek Financial Counselling

Your financial history is influential in most of your activities. For example, you need a credit report to get financial assistance to buy assets such as a car or a house. The lending institution will require proof of your ability to meet the repayment terms. Your history will caution them about your repayment abilities, especially if you do not have the financial power to do so (such as when you are declared bankrupt).

With a financial record indicating that you are capable of repaying the loan, the bank or another creditor will not shy away from assisting you. It is the same case when looking for a job because your employer will use this record to ascertain your integrity and analyse your financial history. In essence, this record provides a lot of information about your relationship with lenders. If you default repaying the loans, there will be several court documents attesting to this fact and you might also have a declaration of bankruptcy if you have gone beyond your financial ability. It will be updated from as soon as another transaction takes place with the creditors or you clear pending repayments.

So how would financial counselling benefit you?

Once some individuals get their credit report, they opt to analyse it in their own. This may seem economical but the reality is you could end up digging a financial hole for yourself. When you request your credit report, financial counselling would be ideal in helping you manage your finances. For example, if you have defaulted repaying a loan for one month and it is already indicated in the records, a financial advisor can assist you with getting back on track. This can also be the case if you are about to request for a bankruptcy declaration because the counsellors will explain the advantages of this move and its repercussions on your history. Below are some ways a financial advisor would help you once you have your credit report.

Avoid bankruptcy

You might be surprised to know that there are other ways of going about a financial crisis other than a declaration of bankruptcy. A financial advisor will be able to outline the options available to you, depending on your individual financial record.

Plan your future investments

Financial advisors are trained to help you plan your financial future. This could be in terms of figuring out which investments you could make, come up with budgets for both your personal as well as business expenditure and also come up with payment plans for your current debt.


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