The Age recently reported on a Tribunal hearing involving a well-known finance company.

The Victorian Civil and Administrative Tribunal found that a motor trader who primarily targets people with bad credit history had a leasing process which was seriously flawed and in urgent need of change.

The customer in the case lived on a low income, had been through a bankruptcy and suffered from chronic depression. The Tribunal found the company used inaccurate financial analysis, unfair tactics and unreasonable pressure to get the client to sign a contract.

After the hearing the company was ordered to set aside a car lease and compensate its customer.

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The above example may not be a true reflection of all transactions with the motor trader in question. But it does highlight the need for people who find themselves in a situation where they cannot use the major lenders to do adequate research before deciding on alternative finance.

People with a bad credit rating have their options severely limited when it comes to obtaining finance. Most of the major lenders refuse to lend to someone with a bad credit history – often with good reason.

A person’s credit history shows their ability to repay a debt. Under Australia’s new responsible lending laws, it would not be ethical to offer further credit to someone who already demonstrates problems with repayments.

The thing is many people with a bad credit rating still need to buy cars, live in houses and use phones.

What are the options for someone in this situation?

Well, it depends on what a person’s credit file reads like. In the situation above where the consumer has a bankruptcy on their file – the options are unfortunately limited.

But a little more research, perhaps leasing a cheaper car and having a trusted adviser help in negotiations with finance companies, or even going away and thinking about it before signing may have helped the customer in this situation.

In many other cases, people can take the above option, or they can discover whether they may be suitable for credit repair.

Credit repair is an option for any person who has a default, writ or Judgment on their credit file which they believe is inaccurate, is unjust or just should not be there.

A successful credit repair allows the consumer to have the black mark/s completely removed from their credit rating.

This lending options that they would have had prior to the blemishes on their credit file. So, they can borrow at a lower interest rate with the lender of their choice (provided they meet all other criteria of course).

This can potentially save them thousands of dollars in interest alone.

Credit repair is not encouraged as an option for a consumer who truly has a problem repaying debt. This person should look at minimising as much credit from their lives as possible, and possibly entering into some financial counselling, so that when they are able to borrow again, they don’t repeat the cycle.

However, there are a large number of people with a bad credit rating who are not struggling with repayments. They are simply carrying the bad credit rating unfairly.

Many people are victims of simple and sometimes complicated errors with billing procedures from creditors, are victims of identity theft, have had joint lending situations go wrong (such as divorce, guarantors etc) or have had the default listed incorrectly.

Despite all of these very fair complaints many consumers have been unable to settle the account themselves with the creditor and unable to remove the offending default, writ or Judgment from their credit file.

They are then left to navigate the world of ‘bad credit history’ finance, which can sometimes leave them with more problems than when they started, due to the often high interest rates involved.

So if people know anyone, or are in the situation themselves where they do have a bad credit rating which shouldn’t be there – it could be good advice to get them to seek out a reputable credit repairer to review their credit file and help them back to financial freedom.

Contact for more information on credit repair.

<p><a href=”Image” _mce_href=”″>Image”>″>Image: luigi diamanti /</a></p>