But Mr Doessel is worried it could push more borrowers into higher interest rate loans due to being refused credit with mainstream lenders.

“Many people pay bills late, for a variety of reasons – this doesn’t necessarily mean they intend for the account to go into default. But these late payers could find they end up refused credit, or charged thousands more in interest due to these notations,” he explains.

2. Types of credit

The new laws will now allow information on the type of credit accounts you have, and when they were opened and closed to be shown on your credit history. This will give lenders more ability to determine the relevance of each listed credit account for your specific situation.

3. Credit limit of each account.

The credit limit on each credit account will be used to assess the potential volume of credit the potential borrower could have access to.

But there will be no way of telling what level of debt you actually have only what you could potentially redraw to.

“It may be worth reducing unnecessary credit limits on your accounts before you make your application,” Mr Doessel says.

4. Beware excess credit enquiries.

Whenever a person other than you makes an enquiry on your credit history – that enquiry is recorded on your credit file.

Mr Doessel says some lenders will decline a finance application due to too many credit enquiries, such as two enquiries within thirty days or six within the year.

“By all means ask questions, and do your research on the best home loan for you, but when it comes to giving over your details, and making applications, leave that until you have decided which lender suits you best, to avoid being disadvantaged,” he says.

5. It will still be up to you to ensure your credit file is accurate.

With all of the new information available to lenders about your credit history, it is more important than ever for that information to be accurate.

You can apply for your credit report for free every year by making a request to Australia’s credit reporting agencies – Veda Advantage, Dun & Bradstreet and Tasmanian Collection Services (if in Tasmania).

“It is up to you to ensure your credit file reads accurately,” Mr Doessel says, “and the saving grace for this legislation is the improvements set to be implemented in 2014 around access and correction of your credit file.”

From March 2014, Creditors will be forced to justify disputed credit listings. Notably, your Creditor will have to substantiate the information they report on your credit file if you dispute it.

“This change is crucial, considering the power the Creditor has to impact your ability to obtain credit for years to come. Up till now, there has been little obligation within the legislation for the Creditor to justify credit listings, nor remove incorrect data,” Mr Doessel says.

If the dispute escalates, you can complain directly to the Creditor’s Ombudsman, and in some instances may have a right to remedy under the direction of the Privacy Commissioner.

“Finally there is some real incentive for Creditors to take due care with adding listings to credit files and we as credit repairers ultimately have a better avenue to help our clients remedy their credit rating errors,” Mr Doessel says.

/ENDS.

Graham Doessel – PH 3124 7133

Lisa Brewster – Media Relations media@mycra.com.au

Ph 07 3124 7133 www.mycra.com.au www.mycra.com.au/blog

246 Stafford Rd, STAFFORD Qld. 4053
MyCRA Credit Rating Repair is Australia’s leader in credit rating repairs. We permanently remove defaults from credit files.

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