Graham Doessel, founder and CEO of national credit repair firm MyCRA Credit Rating Repairs and www.fixmybadcredit.com.au addresses some common questions about your credit file.
WHAT is my credit rating?
Your credit rating is really a file on your credit history, and is collated by the major credit reporting agencies on anyone who has ever been credit-active.
Your credit file is then checked by any credit provider and is used to assess both the amount you are able to borrow and your ability to repay the loan.
How do I find out what’s on my credit file?
There are four major credit reporting agencies in Australia: Veda Advantage – which holds the credit file of over 14 million Australians, Dun and Bradstreet, Experian Australia and Tasmanian Collection Service (TASCOL) if in Tasmania.
By law you are entitled to write to or email one of these agencies and request a copy of your credit file for free. It will take 10 working days from application to receive this information, or for a fee it can be provided within 3 working days.
What is defined as a ‘bad’ credit rating?
In broad terms, any defaults, clear outs, court Judgments or writs, external administrations and bankruptcies are all recorded on your credit file and would be considered ‘bad’ credit history by most credit providers.
In this current economic climate basic defaults and even too many credit enquiries or applications for credit may be considered to be bad credit history.
How do I get a bad credit rating?
What is not realised by many people is how easy it is to have a default slapped on your credit file – which will show up as bad credit history. If a bill is more than 60 days late, (including rates, power and mobile phone bills) then a credit provider has the right to notify you of their intentions to record this default on your credit file. Even if this bill is paid, the default usually remains on your record for 5 years.
What are the repercussions of having a bad credit rating?
A bad credit file can severely hamper your chances of obtaining any credit. Your credit health can determine whether you can take out credit cards, personal loans, car loans, enter into mobile phone plans, and of course take out a mortgage.
What can I do to fix my credit rating?
After checking your credit file, there are three things to consider:
1. The accuracy of the report. If there are errors, however small, you have the right to have them rectified. Likewise, if there are numerous strange defaults and or applications for credit that we don’t recognise – contact Police immediately in case of identity theft.
2. Check you were informed of any intention to list.
3. Check the fairness of the listing.
If your file does contain defaults, writs or judgments that you believe are incorrect, unjust or just shouldn’t be there, there is a good chance they can be removed.
You can work with your own credit file to have the defaults removed, or you can contact a third party ‘professional credit repairer’ to help you.
How can a professional credit rating repairer fix my credit rating?
If people find inconsistencies on their credit report, in the past they have run into difficulty trying to get the offending black marks removed.
Listings are not removed by creditors unless the credit file holder can provide adequate reason and lots of evidence as to why the listing should not be there. Many individuals find it extremely difficult to apply the letter of the law in their own circumstances and so end up seeking someone out a professional credit repairer, who can work on their behalf.
Credit repair requires knowledge of the legislation, lots of evidence, tenacity and perseverance – which a good quality professional credit repairer will have.
Professional credit repairers have also built successful relationships with agencies and creditors alike, and have a better ability to negotiate the listing’s removal on the client’s behalf.
What can I do to ensure I maintain credit file health?
1. Pay all accounts on time. This is the easiest way to ensure there are no adverse listings on your credit file. If you are struggling to make repayments – contact the creditor about a repayment scheme.
2. Regularly obtain a copy of your credit file – once a year is recommended to ensure accuracy.
3. Be aware of excessive credit enquiries. If you are not sure about your credit health, you should get it checked before applying for new credit. Some lenders are rejecting loans for as little as two enquiries in 30 days, or six enquiries within the year. Also avoid ‘shopping around’ for credit, as whether or not the loan was approved doesn’t show up on your credit report – only the fact that you made the enquiry.
If you are seeking advice on credit file health from a professional credit repairer, contact MyCRA Credit Rating Repairs on www.mycra.com.au or tollfree 1300 667 218.