MyCRA Specialist Credit Repair Lawyers

Tag: bad credit rating

  • Bad credit ratings forcing people out on the fringe

    If people need access to money – and quickly – there are a number of options. Whilst many people may not be able to walk in to a bank and withdraw from their savings, they could use their credit card, extend their mortgage or take out a personal loan to cover that unexpected expense. But what about the over 3.47 million Australians (Veda Advantage – 2009) who are living with a negative listing on their credit file – also known as a ‘bad credit rating’?

    When times get tough, many of these people are left with very few choices. Negative listings are recorded on a person’s credit file for between 5 and 7 years, depending on the type of listing. How many people would NOT have surprise expenses during that period? Not many.

    People with adverse listings can be the lepers of the finance world. Particularly those people with a significant number of negative listings on their credit file. No one wants to touch them. No one that is, except for those ‘informal’ finance companies such as pay-day lenders and pawnbrokers.

    Last Friday, the Sydney Morning Herald ran a story titled ‘Finding favour on the fringes’ in which Bina Brown writes of the fine line between meeting a legitimate market demand and preying on desperate people. The SMH reports that 500,000 people a year access $800 million in short-term credit facilities. Pay-day loans are typically considered to be loans taken for less than $500 for two to four weeks.

    The article quotes a report ‘Measuring Financial Exclusion in Australia’ prepared by the Centre for Social Impact (sponsored by NAB). The Centre looked in to the growing demand for this ‘fringe’ credit market, and the rapidly expanding network of companies willing to supply it.

    The report says “Financial exclusion exists where individuals lack access to appropriate and affordable financial services and products – the key services and products are a transaction account, general insurance and a moderate amount of credit.”

    How the fringe credit market works

    “Lender fees vary, but $25 to $30 per $100 advanced would be typical. A loan of $1000 for three months might attract a fee of about $450, or ultimately $111 a week for 13 weeks in scheduled repayments.

    While many consumer groups are against this type of lending since it is often vulnerable people who access the loans, industry proponents argue anyone can find themselves short of cash and short-term credit can make a considerable difference to people’s lives.

    Both sides admit there are rogue players in the industry, such as those who charge an upfront fee of $30 on a $100 loan plus the interest rate which is capped at 48 per cent a year.

    They then set a two-week period to repay the loan (which the broader industry believes to be too short a time period).

    If the loan can’t be repaid after two weeks or the next pay date, they charge another $30 and give them another two weeks and so on. If the client defaults on the loan they charge $75.” SMH reports.

    Reforms to legislation

    Under the Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 before Federal Parliament the most a person borrowing $100 can be charged is $100, although this would exclude any default fees.

    The proposed reforms have also included a cap on the upfront fee that can be charged on small amount loans (loans for $2000 or less for less than two years) of 10 per cent of the loan amount, plus an interest rate of 2 per cent a month. A parliamentary committee reviewing the legislation is due to report by November 14.

    These reforms would be welcomed, to ensure that those people who don’t have access to standard credit are not digging an even bigger hole for themselves by being forced to pay exorbitant fees and interest charges when they are obviously in desperate need of a break.

    If not fringe credit, then what are the options for those who are financially excluded due to a bad credit rating?

    Well, it depends on what a person’s credit file reads like.  If the person has entered into a debt agreement or bankruptcy – the options are unfortunately limited, access to these types of loans may be necessary. An alternative could also be found in Government assistance.

    In many other cases, there may be no need for people to be disadvantaged in this way by a bad credit rating. Particularly if their credit file shows defaults, writs or Judgments which they believe are inaccurate, unjust or just should not be there.

    Credit repair allows the consumer to have the black mark/s completely removed from their credit rating. This gives them the 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 the best solution for those potentially hundreds of thousands of Australians who may be living with a bad credit rating and who are completely capable of repaying a loan. It was bad luck or creditor error that instigated the adverse listing in the first place.

    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.

    How likely would it be that a credit file would contain errors?

    It is astounding how common credit file errors may be, considering the debilitating effects for the credit file holder once they have a negative listing on their file.

    The possible volume of errors on Australian credit files was exposed by a small scale study conducted in 2004 by the Australian Consumer Association (now Choice Magazine). It revealed about 30% of credit files were likely to contain errors.

    “In our view, there are serious, systematic flaws which are leaving an increasing number of Australian consumers vulnerable to defamation, mis-matching and harassment,” the ACA report said.

    Transferring those figures from the Choice study to the number of credit files in Australia today, could mean potentially 4 million errors currently exist on credit files in Australia.

    Recently Channel 7’s Today Tonight interviewed Veda Advantage’s Head of External Relations, Chris Gration on the possible number of errors on credit reports. He admitted errors within their system alone amounted to 1%.

    “We give out about 250,000 credit reports to consumers every year. But only in 1 per cent of cases is there a material error on the file, so a default or an enquiry that’s incorrect,” Mr Gration told Today Tonight.

    Even if as little as 1 per cent of those 14 million credit files contained errors, that would still currently leave 140,000 credit files in Australia containing errors that just shouldn’t be there.

    So rather than allowing their credit file to continue to plague them, navigating the world of ‘bad credit history’ finance, or the ‘fringe credit market’ which can sometimes leave them with more problems than when they started, people should be educated on the possibility that their good name can be restored.

    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 MyCRA Credit Repairs tollfree on 1300 667 218 or click here to find out the 6 simple steps to credit repair.

    Image: Nutdanai Apikhomboonwaroot/ FreeDigitalPhotos.net

  • New credit reporting laws could see millions of people refused home loans

    The Federal Government is preparing to roll out its new credit reporting laws.

    Its comprehensive credit reporting system will allow lenders more access to a potential borrower’s credit information – but the move to positive credit reporting could disadvantage millions through allowing late payments to be noted on Australian credit files.

    This new aspect to credit reporting virtually ensures there is no room for error with consumers or creditors when it comes to loan repayments or people may face a bad credit rating.

    The Government proposes to bring in  ‘repayment performance history’ to credit files – which among other things will allow for credit providers bound by the National Consumer Credit Protection Act to make late payment entries on a person’s credit file if payments are late even as little as one day.

    In these harsh economic times, the ‘noting’ of late payments on a person’s credit file will most definitely impact on the consumer’s ability to obtain finance.
    Lenders are sure to see late payments as a potential credit risk. If the late payment of a few days is due to delays in bank processing of transfers or direct debits, paying at Australia Post, BPay etc. – these things are beyond the control of the average consumer yet that is exactly who will get hurt.

    Under current credit reporting legislation, late payments are not noted on a person’s credit file until they pass to the ‘default’ stage – which is more than 60 days in arrears. The creditor is also bound to fulfil a series of requirements to give the consumer the opportunity to rectify the situation before listing the default. This legislation will remain, but the ‘repayment performance history’ will also be added. The potential for error in this instance is high.

    There are more than 14 million credit files in Australia (14.7 million files are held by credit reporting agency, Veda Advantage alone), and approximately 3.47 million negative listings (Veda Advantage, 2009), but the number of possible errors which exist is not certain.

    The possible volume of credit files with errors was revealed by a small scale study conducted in 2004 by the Australian Consumer Association (now Choice Magazine), revealing about 30% of credit files were likely to contain errors.

    “In our view, there are serious, systematic flaws which are leaving an increasing number of Australian consumers vulnerable to defamation, mis-matching and harassment,” the ACA report said.

    Transferring those figures from the Choice study to the number of credit files in Australia today, could mean potentially 4 million errors currently exist on credit files in Australia.

    Recently Channel 7’s Today Tonight interviewed Veda Advantage’s Head of External Relations, Chris Gration on the possible number of errors on credit reports. He admitted errors within their system alone amounted to 1%.

    “We give out about 250,000 credit reports to consumers every year. But only in 1 per cent of cases is there a material error on the file, so a default or an enquiry that’s incorrect,” Mr Gration told Today Tonight.

    Even if as little as 1 per cent of those 14 million credit files contained errors, that would still currently leave 140,000 credit files in Australia containing errors that just shouldn’t be there.

    Under current credit reporting legislation, it is up to the consumer to check for errors. Credit file holders are able to obtain a copy of their credit report from one or more of Australia’s credit reporting agencies for free every 12 months.

    But the problem is, consumers are often not aware across the board of their responsibility to check the accuracy of their own credit file, so many errors go undetected.

    Often it is not until people apply for a home loan that they learn they have a bad credit rating, but by then it is too late and they are generally refused credit or forced to take on non-conforming loans at sky-high interest rates to secure the home.

    When disputing any adverse listing, it is up to the credit file holder to provide reason as to why the creditor has not complied with legislation. Unfortunately many people find this process difficult – negotiating with creditors is not always easy for the individual to undertake.

    The job of credit repairers is to check the process of listing defaults for legislative and or compliance errors, any such errors could deem the credit file default listing unlawful, at which time the creditor is advised to remove the default.

    Given the difficult process of default removal, it is worrying for consumers that getting ‘late payment’ errors removed from credit files may be just as problematic.

    If people want to obtain more information on removing errors from credit files, they can contact MyCRA Credit Repairs tollfree on 1300 667 218 or visit the main website www.mycra.com.au.

  • Till debt do us part: Navigating joint finances

    Some people are great with money – but can still experience financial downfalls and sprial into debt and a bad credit rating due to the shortcomings of their partners.

    Often people are unaware their partner is generating defaults on their credit rating until it is too late. They apply for credit in their own right and are unable to proceed due to debts and bad credit their partner has initiated while they are together.

    Often we hear from clients “I’m not sure how this happened – how can I be responsible for something my partner did?” Unfortunately when couples go into joint debt, both credit files are at risk if repayments aren’t made.

    So how do people protect themselves, their assets and their good credit rating, BEFORE they marry or move in together?

    Recently savingsguide.com.au looked into this issue in their post ‘The Debt Affair: When your partner is hiding debt’.

    They talk about establishing financial boundaries when people are new in a relationship. The article talks about the signs to watch out for when people suspect their partner is hiding debt.

    Some of those include:

    -Assume that the truth may be stretched when it comes to money
    -Often money problems can be a result of another issue: stress, addiction, self-esteem.
    -Discussing money is taboo
    -Do their spending patterns show they spend more than they have?
    -Ask for full disclosure

    People should remember that relationships in their new stage are some of the most exciting times in our lives. But when it comes to taking the next step and moving in together, everyone should ask about their partner’s financial past.

    Otherwise they may be forced to suffer with a bad credit rating due to mistakes made by partners – past or present.

    Bad credit is such a phenomenal problem in this day and age, with lots of people living beyond their means and creditors eager to issue defaults.

    Many people come unstuck by not asking the tough financial questions about their prospective partners early in the relationship.

    People should sit down together before any ties are made and discussing what financial position the other is in. Ask whether they have any debt; talk about paying bills; get a general feel for how this person regards money and finances. If they appear too blasé about money, this should ring alarm bells. It may not mean the relationship needs to end, but it should mean you keep finances separate for a significant period of time. You could also suggest getting a copy of your credit files to see if there are any blemishes.

    A credit file is compiled on any person who has ever been ‘credit active’. It lists personal details like name and address, but also any times the person has applied for credit, any defaults (overdue accounts), court judgements, writs and bankruptcies.
    Prospective partners can request a copy of their credit file for free from the major credit reporting agencies – Veda Advantage, Dun & Bradstreet or Tasmanian Collection Services (if you are Tasmanian) and Experian. This will be provided within 10 working days.

    Any black marks on a person’s credit file remains on their file for 5 years and can greatly hinder a person’s chances of receiving further credit.
    A bad credit rating sticks. Most clients find they are black listed from credit for a five year period following a default on their record. Even having too many credit enquiries or a default from a simple unpaid phone bill can be enough to be refused a home loan with most lenders in the current economic climate.

    My CRA Credit Repairs has some tips for people entering into a new ‘financial’ relationship:

    •When you enter into any financial agreement with another person – don’t bury your head in the sand when it comes to the repayments. Regularly check your statements and bills so you can catch problems early.
    •Be aware that as high as emotions can run, they can also get just as low. Your financial generosity now could become the very thing that is used against you if the relationship sours. Consider carefully how secure you would be in each transaction if things did take a turn for the worse.
    •Consider keeping some things separate. Just because you have bought a home together doesn’t mean you can’t keep other bank accounts, credit card and previous homes in your name only.
    •Get a copy of your credit file regularly. This will notify you of any problems before you apply for credit in the future.

    Contact MyCRA Credit Repairs on 1300 667 218 for help with credit repair.
    Image: photostock/ FreeDigitalPhotos.net

  • New recommendations to protect Telco customers welcomed

    Media Release
    12 September

    Changes recommended by The Australian Communications and Media Authority in its final report into the telecommunications industry should finally see Telcos held accountable for poor customer service and complaints handling, according to a national credit repairer.

    Director of MyCRA Credit Repairs, Graham Doessel says if the ACMA’S changes are implemented swiftly across the industry, customers should reap the rewards.

    “A shake up in the Telco industry is long overdue. Australians have been caught out time and again with botched bills and unresolved disputes with their Telco providers and their credit files have been damaged as a result,” Mr Doessel says.

    He says about one third of his credit repair clients have had issues with their Telco provider which has left them out of pocket or facing black marks on their credit rating.

    “Our clients have suffered greatly for the inadequate policies and procedures of many of the Telco providers in this country. We send out far too many complaints every day to the Telecommunications Industry Ombudsman (TIO) requesting investigations into errors that have found their way onto customer’s credit files,” he says.

    The ACMA is formally inviting the industry to incorporate the following changes to its Telecommunications Consumer Protection (TCP) Code by February 2012:

    1.Clearer pricing information in advertisements allowing consumers to more easily compare services.
    2.Improved and more consistent pre-sale information about plans.
    3.Developing meaningful performance metrics which allow consumers to compare providers.
    4.Tools for consumers to monitor usage and expenditure.
    5.Better complaints-handling by providers.

    “We have closely consulted on these outcomes with consumers and industry and the overwhelming response has been that improvements are both urgent and necessary,” ACMA Chairman, Chris Chapman says.

    The ACMA says if the Telecommunications industry fails to develop a code that addresses these concerns, the ACMA will mandate the changes through direct regulation.

    The Telecommunications Industry Ombudsman recently revealed its findings on the extent of discontent within the industry in a report released last month from a survey of more than 500 Telco customers who had lodged complaints between July and August 2010.

    The survey revealed more than half of consumers reported contact with their service providers five or more times before ringing the TIO. It also revealed most consumers reported spending three hours or more unsuccessfully trying to solve their complaint, with one in 5 saying they spent more than nine hours.

    “Consumers who come to the TIO report spending substantial time and effort solving their complaints,” said Ombudsman Simon Cohen. “They report being transferred from department to department, not being transferred to supervisors and, perhaps most frustratingly, getting no solution or a broken promise for their efforts. They are – by any measure – resilient consumers.”

    Mr Doessel says when disputing bills with the Telco industry, many people are unfairly penalised with a bad credit rating when the matter could have been dealt with better by the Telco in the first place.

    “It is astounding the number of Telco credit file listings which contain errors, or have been put there unjustly or unfairly. Under current legislation, people do have the right to have credit file discrepancies resolved. But unfortunately it can be difficult for customers if they are not aware of the appropriate legislation and don’t have time to negotiate with creditors,” he says.

    Under current legislation, an account which is more than 60 days in arrears can be listed by the creditor as being unpaid on the customer’s credit file. This ‘default’ is generally listed on a person’s credit file regardless of whether they believe there are errors in the details of the bill or with the payment amount.

    “Defaults remain on a person’s credit file for 5 years. Currently, defaults – even those that are marked as ‘paid’, will prevent people from obtaining a home loan with most lenders. In fact, even having a few too many credit enquiries can be enough for an automatic decline” he says.

    Mr Doessel is hoping the ACMA’s recommendations are taken on board swiftly to ensure a more transparent industry.

    “Hopefully the changes will result in less confusion and complaints in general amongst Telco customers and fewer people who have their good name destroyed unnecessarily due to credit file defaults which should not be there,” he says.

    /ENDS

    Please contact:
    Lisa Brewster – Media Relations   Mob: 0450 554 007 media@mycra.com.au
    Graham Doessel – (07) 3124 7133  www.mycra.com.au/ www.mycra.com.au/blog

    MyCRA Credit Repairs is Australia’s leader in credit rating repairs. We permanently remove defaults from credit files.

    Links:
    http://www.acma.gov.au/WEB/STANDARD/pc=PC_410157
    http://www.tio.com.au/media_statements/RELEASES/2011/08_12_Resilient_Consumers_Report.html

    Image: Stuart Miles / FreeDigitalPhotos.net

  • New statistics paint positive picture of housing market

    The Federal Government’s announcement of the best economic growth in four years and the prediction that interest rates remain steady for the rest of the year, may be the catalyst for a return to slow but positive growth in the housing market. The Government announced today a 1.2 per cent increase in GDP in the 3 months to June 30.

    The trend is definitely upwards following the latest housing statistics from the Australian Bureau of Statistics. Whilst a minimal increase, and less than expected by economists, the result should still be heartening for the many brokers, investors and home owners alike who have been waiting with bated breath for something positive from the property market.

    Statistics released from the ABS on July’s housing figures show a one per cent rise in home loans for the month which is an improvement on the flat market of the last few months.

    Total housing finance by value rose 1.6 per cent in July, seasonally adjusted, to $20.576 billion. The value of home loans for owner-occupied homes rose 1.4 per cent to $14.4 billion after seasonal adjustments. The value of loans for investment homes rose 1.9 per cent to $6.2 billion.

    The number of commitments to buy new homes fell 0.9 per cent after seasonal adjustments, while commitments to buy established homes rose 1.3 per cent.

    The number of loan commitments for building homes fell 0.8 per cent.

    JULY KEY FIGURES

    Trend estimates
    Seasonally adjusted estimates
    Jul 2011
    Jun 2011 to Jul 2011
    Jul 2011
    Jun 2011 to Jul 2011
    Value of dwelling
    commitments(a)(b)
    $m
    % change
    $m
    % change
    Total dwellings
    20 449
    1.2
    20 576
    1.6
    Owner occupied
    housing
    14 280
    1.5
    14 370
    1.4
    Investment housing –
    fixed loans(c)
    6 169
    0.5
    6 206
    1.9
    Number of dwelling commitments(a)(b)
    no.
    % change
    no.
    % change
    Owner occupied
    housing
    49 548
    1.7
    49 813
    1.0
    Construction of
    dwellings
    4 796
    1.3
    4 757
    -0.8
    Purchase of new
    dwellings
    2 098
    2.3
    2 084
    -0.9
    Purchase of
    established dwellings
    42 654
    1.7
    42 972
    1.3
    (a)
    Includes refinancing (see Glossary).
    (b)
    Excludes alterations and additions.
    (c)
    Excludes revolving credit.

     

    Value of dwelling commitments,
    Total dwellings
    Graph: Value of dwelling commitments, Total dwellings

    No. of dwelling commitments,
    Owner occupied housing
    Graph: No. of dwelling commitments, Owner occupied housing

    Coupled with the small rise in home loans, were statistics released yesterday from the ABS showing household spending has also risen 1 per cent in the

    With this small boost in confidence, will be the need for prospective home owners to ensure they have not been tarnished by the gloomy periods of recent months in respect to their credit file. It would suggest this could be a good time for people to do a credit check, and ensure their credit report comes back clear.

    Whilst the outlook may be positive, it probably hasn’t transferred to banks yet – so they may still require borrowers to have a clear credit file to obtain a mortgage in the current market.

    People should be aware that any repayments which were left late past 60 days may have been listed on their credit file as defaults. This includes any bills which were in dispute.

    People should also be aware that creditors make mistakes when putting listings on credit files all the time. Sometimes it can be a case of mistaken identity, the wrong person ends up with the bad credit rating, sometimes it can be a change in address which causes the adverse listing, or simple computer error. So it is worth doing a free check every 12 months, even if people think they should have no adverse listings on their credit file.

    It is the credit file holder’s responsibility to obtain a credit report from the credit reporting agencies and ensure their credit file is as it should be. Contrary to popular belief, if the credit report shows inconsistencies, people do have the right to have them removed. If a listing has been put there in error, it is possible to have it removed – NOT JUST MARKED AS PAID. For those people who were previously unable to obtain a mortgage due to credit file defaults this may open a door they thought was closed for 5 years (the term of a default).

    For more information on how to check credit files, and for help with credit rating repair, visit MyCRA Credit Repairs website.

  • 7 ways to improve your credit rating in Australia

    There are countless pieces of advice available to people out there, aimed at offering to ‘improve your credit rating’ or ‘fix your credit score’, and they are read by many people hoping to get the best chance of approval for home loans, personal loans or other forms of credit.

    What many Australians don’t realise when they read these articles is that many of them are written in countries like the U.S. and U.K., whose credit reporting systems are very different from Australia’s. So the information, whilst good, often doesn’t apply for people in this country.

    In fact, many times if Australians follow that information they may actually be hindering their chances of obtaining credit in the current market, not helping it.
    So here is some information for people concerned about their credit rating, to have as a reference for what applies in this country.

    What exactly is my credit file?

    A credit file is made for every person who is credit active in Australia. Veda Advantage, Dun & Bradstreet, Tasmanian Collection Service (if Tasmanian) and new entrant Experian may all hold information on credit active individuals.

    A person’s credit file contains their personal information. It also records any credit applications, all loans which are current and also records any adverse listings such as Defaults, Writs, Judgments, Clear-outs or Bankruptcies which are under that person’s name.

    It is from this file that creditors make a decision whether or not to lend people money. This information is then available to banks and building societies; finance companies like GE and Avco; mobile phone companies and retail stores like Myer, Harvey Norman and Wow Sight & Sound.  These companies are all known as credit providers or creditors.

    What many people aren’t aware of is that any creditor may place an adverse listing on a person’s credit file if the account has remained unpaid past 60 days. This includes phone companies, utility companies, and gyms as well as banks, finance companies and stores – and the outstanding amount can be for as little as $100.

    A negative credit reporting system

    Currently Australian credit reporting system is a ‘negative’ system. This will change as Australia moves towards positive credit reporting, but until then – the rules of the game are very different from many other countries. Only negative data is recorded on a person’s credit file. From this point of view – there is nothing people can do to counter-balance any negative data which is displayed on their credit file. It is either present – or not.

    So is there anything I can do to change my bad credit rating?

    YES AND NO! There is no ‘score’ as such in Australia. So a person’s credit file is what it is with all adverse listings displayed for creditors to consider, and no amount of ‘positive’ credit information can currently change that. Under Australia’s credit reporting laws these adverse listings have a set time frame they must be listed for. This is 5-7 years depending on the type of listing. Unfortunately most adverse listings guarantee automatic decline on credit approval in the current market. Adverse listings are not removed ahead of time, but a creditor will mark the listing as paid if the account has been settled.

    However, if a person’s credit rating contains listings which should not be there, or there are errors, the credit file holder does have the right to have this information rectified.

    5 ways to improve your chances of obtaining credit under Australia’s credit reporting system:

    1. Reduce credit limits.

    Lofty credit limits do not improve a person’s credit ‘rating’. If the loan applicant has a credit limit of say $20,000 on their credit card, the debt amount on that card will be calculated on $20,000 – even if the actual amount the applicant has owing on that card is only $5,000. So a potential borrower should seek to reduce any credit limits on cards or loans they currently hold.

    2. Reduce credit enquiries.

    Do not shop around for credit. Whenever a person other than the credit file holder makes an enquiry on their credit record – that enquiry is recorded on the person’s credit file. Currently there is no way of seeing on someone’s credit report if the loan was approved or not, only that the application was made. Some lenders are refusing home loan applications due to too many credit enquiries, such as two enquiries within thirty days or six within the year.

    3. Check credit file.

    Anyone has the right to request a copy of their credit file, to see what is being said about them. This report is free for the credit file holder every 12 months. The request should be made to all the applicable credit reporting agencies, and a report will be made to the credit file holder within 10 working days.
    There is the potential for creditors to make mistakes when entering listings on credit files. So anyone who is credit active should check theirs, regardless of how diligent they think they may have been with their repayments.

    A small scale study conducted by the Australian Consumer Association (now Choice Magazine) in 2004, revealed a staggering 30% of credit files were likely to contain errors.

    “In our view, there are serious, systematic flaws which are leaving an increasing number of Australian consumers vulnerable to defamation, mis-matching and harassment,” the report said.

    Adverse listings can sometimes occur due to identity theft; some people are caught in issues over separation from their spouse; some have been disputing the bill which went to default stage and many people are just victims of the fallout from inadequate billing procedures – wrong names, wrong addresses errors with creditor computer systems, and sometimes human error.

    Many times people are unaware they have adverse listings on their file until they apply for credit and are refused. Unfortunately at that time it can be stressful, and they can lose the home, or be forced to choose a different loan with a higher interest rate.

    4. Pay any outstanding amounts.

    If a credit file check reveals outstanding amounts on a person’s credit file, paying them can be of benefit to a person’s credit rating. Whilst the creditor cannot remove the listing, they can mark the listing as paid, which in some cases could improve people’s chances of obtaining credit.

    5. Remove errors.

    Unfortunately 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. Credit repair also requires knowledge of the legislation and perseverance. But for those people whose financial freedom is hindered because their credit file contains errors, it is a point worth fighting for.

    If people have neither the time, knowledge or patience for credit repair they can seek out a reputable credit repairer who will be able to work on their behalf to negotiate with creditors to have the defaults removed if there are errors.

    A clear credit record can allow potential borrowers the option to choose the best loan to suit them, with the best interest rate.

    6. Make repayments on time.

    Repay any bills received by the due date. Repay over the minimum amount required on credit cards. If people are having trouble paying on time, they should contact the creditor as they may be able to work out a payment plan rather than listing the non-payment as a default. If people are disputing bills with creditors, they should still pay the bill by the due date. Better to be reimbursed the outstanding amount than have the creditor put a default on their credit file in the process.

    7. Show stability.

    Having a stable address, stable income and stable employment can all improve someone’s chances of obtaining credit. Right before someone applies for a home loan is not the time to change jobs – regardless of how good the wages are.

    Interestingly, many errors in credit reporting occur when people change addresses, so keeping a stable address can also decrease the likelihood of bills going to the wrong address and defaults being placed on a person’s credit file unnecessarily.
    People can visit the MyCRA Credit Repairs website for more help with their credit rating, and help to repair a bad credit rating.

    Image: vichie81 / FreeDigitalPhotos.net

  • Found a better home loan? Check your credit file before applying to refinance

    Media Release

    25 August 2011

    Home owners refinancing in the wake of the government’s scrapping of home loan exit fees should consider the health of their credit file before they make a new application, according to a national credit repairer.

    Director of MyCRA Credit Repairs, Graham Doessel says existing home owners should exercise their right to a free credit report from the major credit reporting agencies prior to making any enquiries on a new home loan.

    “People who already have a mortgage probably haven’t considered how important a clear credit rating is – even second time around. Regardless of whether people have been diligent payers, creditors can and do sometimes make mistakes with people’s credit files and some people end up with black marks against their name that shouldn’t be there,” Mr Doessel says.

    A bad credit rating can result when a bill or repayment goes unpaid past 60 days. After this time, a creditor has the right to list that non-payment as a default on the person’s credit file.

    “In the current finance market, any black mark generally results in an automatic decline with the major lenders. Even too many credit enquiries can blow someone’s chances of finance approval, so it really is important for people to know what is said about them on their credit report before they go in to refinance,” Mr Doessel says.

    This comes as The Telegraph reported earlier this month existing home owners are staying put and refinancing in high levels.

    It reported mortgage broker Australian Finance Group’s figures of about 39 per cent of their July mortgages were from people refinancing. AFG attributed this trend to the major banks competing very aggressively on fees and price since exit fees were banned.

    “If you have a home loan at the moment, it’s the best time in 20 years to be looking for a better deal,” AFG spokesman Mark Hewitt said.

    Mr Doessel says many of his clients have been in the middle of refinancing, whether to reduce their repayments or to get a better deal – when the bank has performed a credit check and found defaults against their name.

    “Sometimes people don’t know their good name is compromised until they apply for finance and are refused. Many times if they had checked their credit file they may have had the chance to rectify any errors or save themselves the embarrassment prior to applying for the loan,” he says.

    Mr Doessel says approximately 63% of the clients who contact his company for credit repair would be people who have defaults, writs or Judgments which are listed in error on their credit file.

    “We have clients who are facing identity theft; some are caught in issues over separation from their spouse; some have been disputing a bill which went to default stage and many people are just victims of the fallout from inadequate billing procedures – wrong names, wrong addresses, human and computer errors,” he says.

    Under current credit reporting legislation, consumers have the right to a free credit report from the credit reporting agencies once a year.

    People need to contact all the credit reporting agencies to request their report – as creditors have access to 3 agencies within mainland Australia and 4 in Tasmania. The report must be provided to them in writing within 10 days of the request.

    Consumers also have the right to have any inconsistencies on their credit file rectified.  Defaults can be marked as paid if the account has been settled.

    But Mr Doessel says listings are not removed by creditors unless the file holder can provide adequate reason and lots of evidence as to why the listing should not be there.

    “Credit repair requires knowledge of the legislation, lots of evidence and perseverance. But for those people whose financial freedom is hindered because their credit file contains errors, it is a point worth fighting for,” he says.

    /ENDS
    Please contact:
    Lisa Brewster – Media Relations   Mob: 0450 554 007 media@mycra.com.au

    Graham Doessel – Director  (07) 3124 7133 http://www.mycra.com.au

    MyCRA Credit Repairs is Australia’s leader in credit rating repairs. We permanently remove defaults from credit files.

    Link: http://www.dailytelegraph.com.au/money/better-mortgage-deals-beckon-as-banks-create-more-deals/story-e6frezc0-1226108846876

    Image: renjith krishnan / FreeDigitalPhotos.net

  • Australian PlayStation users given free identity theft protection for a year

    Finally Sony has recognised the possible threat that was made to the personal information of its 1.5 million Australian PlayStation users. After one of the world’s biggest data breaches occurred on the PlayStation Network in April, Sony has come to the party with an offer of free identity protection for the year.

    The Sydney Morning Herald reports about this in its story ‘Sony offers free ID theft protection to Aussies.’

    The package includes “CyberAgent Internet Surveillance”, whereby CS Identity’s technology scours the internet for unauthorised use of your identity. The firm conducts 24/7 monitoring of criminal web pages, chat rooms, bulletin boards and file sharing sites to identify trading or selling of customers’ personal information.

    Identity restoration is also included, which involves the firm helping customers restore their identity after becoming the victim of identity theft.
    The data stolen during the breach includes names, gender, addresses, email addresses, birthdays and login passwords for Sony’s PlayStation Network and its Qriocity music streaming service.

    All up 1,560,791 Australian accounts were affected – 280,000 of which had credit card details. This is a fraction of the 77 million total accounts exposed worldwide.

    Security experts have warned that even without credit card details, hackers could use the other stolen details to construct highly targeted and believable attacks designed to steal more personal information and/or infect computers.

    The SMH says the Australian Privacy Commissioner, Timothy Pilgrim, has been investigating the breach, and they say it is still ongoing. In May we blogged about Australia’s Privacy Laws, as they relate to data breaches.

    The Government is set to introduce tougher Privacy Laws following this data breach. One of which will be mandatory notification laws, helping to protect Australians from identity theft following any future data breaches, and another which will allow victims of identity theft following a data breach to be able to obtain some kind of compensation for any loss they may receive.

    The Sydney Morning Herald recently reported one in 10 Australians who use the internet have lost money to online identity fraud over the past year, according to VeriSign Authentification Services. We recently blogged that these fraud figures have doubled since 2007. The cost of this is estimated to be $1.286 billion during the past year.

    But the real cost of identity theft comes when a person’s credit file is impaired. When identity theft affects people’s credit files there is no reimbursement for losing the money they could borrow. But victims often lose their dream home, can’t borrow for their business and can’t get the new car they wanted.

    Often victims don’t know about the fraud until they apply for credit and are refused because they have a bad credit rating.

    Image: Arvin Balaraman / FreeDigitalPhotos.net

  • Phone bill complaints – the dangers for your credit rating

    Media Release

    15 August 2011

    Customers who are fed up with the process of disputing their phone or internet bills are warned they still need to follow the system to avoid finding themselves with a bad credit rating, according to a national credit file repairer.

    Director of MyCRA Credit Repairs, Graham Doessel says when disputing bills with Telco providers, people make two common mistakes which can cost them their good credit rating unnecessarily.

    “Phone companies make mistakes with billing all the time, and undoubtedly some of those mistakes are difficult to resolve. Where their customers go wrong, is assuming just because they have spoken to someone on the phone about the bill, they are no longer obliged to comply with its due date.”

    “Consumers also need to ensure when they are disputing a bill, they obtain any resolution in writing before assuming the matter is fixed,” Mr Doessel says.

    Under current legislation, an account which is more than 60 days in arrears can be listed by the creditor as being unpaid on the customer’s credit file. This is regardless of whether the customer believes there are errors in the details of the bill or with the payment amount.

    This comes as the Telecommunications Industry Ombudsman reveals unhappy customers experience repeated and time consuming contact with Telcos before referring their matter to the TIO.

    The TIO released findings from its research paper, Resilient Consumers, on Friday, a survey of more than 500 consumers who lodged complaints between July and August 2010.

    The survey revealed more than half of consumers reported contact with their service providers five or more times before ringing the TIO. It also revealed most consumers reported spending three hours or more unsuccessfully trying to solve their complaint, with one in 5 saying they spent more than nine hours.

    “Consumers who come to the TIO report spending substantial time and effort solving their complaints,” said Ombudsman Simon Cohen. “They report being transferred from department to department, not being transferred to supervisors and, perhaps most frustratingly, getting no solution or a broken promise for their efforts. They are – by any measure – resilient consumers.”

    Mr Doessel says unresolved bill disputes with Telcos, where people end up with defaults on their credit rating would make up about one-third of his clients.

    “Many clients get nowhere trying to dispute the bill with the phone company, and end up copping a default on the chin if they refuse to pay the bill.”

    “Some also believe the matter has been resolved. It is not until they apply for credit in a different circumstance that they realise the Telco has placed a default on their credit record,” he says.

    Defaults remain on a person’s credit file for 5 years. Under current legislation, defaults generally do not get removed from an individual’s credit file, but can be marked as paid if they have been paid.

    “Currently, defaults – even those that are marked as ‘paid’, will prevent you from obtaining a home loan with most lenders. In fact, even having a few too many credit enquiries can be enough for an automatic decline” he says.

    Mr Doessel says many people are unfairly penalised with a bad credit rating when the matter could have been dealt with better by the Telco in the first place.

    “It is astounding the number of Telco credit file listings which contain errors, or have been put there unjustly or unfairly. Under current legislation, people do have the right to have credit file discrepancies resolved. But unfortunately it can be difficult for customers if they are not aware of the appropriate legislation and don’t have time to negotiate with creditors,” he says.

    MyCRA Credit Repairs outlines the process they recommend people should take when disputing a bill in Australia:

    1. Contact the bill provider as soon as you receive the bill and attempt to resolve the discrepancy.
    2. Make a note of the name of each person you speak to. Note any resolutions that were reached and request those be sent to you in writing.
    3. If the credit provider fails to honour the discrepancy, advise them you will be contacting the appropriate ombudsman.
    4. If the due date for the bill approaches and the issue has not been resolved, pay the bill by the due date. You can seek reimbursement at a later date, but this will prevent a default for that bill being listed on your credit file.
    5. Hang in there, play by the rules of the game and you should find your matter sorted out eventually. But at least once the matter is sorted out you aren’t left attempting to remove a default on your credit file as well.

    / ENDS

    Please contact:
    Lisa Brewster – Media Relations   Mob: 0450 554 007 media@mycra.com.au

    Graham Doessel – Director Ph: 3124 7133 http://www.mycra.com.au/

    MyCRA Credit Repairs is Australia’s leader in credit rating repairs. We permanently remove defaults from credit files.

    Links:

    http://www.tio.com.au/media_statements/RELEASES/2011/08_12_Resilient_Consumers_Report.html

    Image: Danilo Rizzuti / FreeDigitalPhotos.net

  • Going guarantor: how to keep your credit rating safe

    It is natural for family and close friends to want to help each other when they need it. For guarantors – they are often near to retirement, with perhaps only a small mortgage on their home. They have no other debts and a good credit rating.
    This gives them the ability to help out often their children or other family members who seem to be struggling to get ahead – possibly unable to buy a home, purchase a car or enter into the business they have been hoping to secure.

    It seems so easy just to sign off on that loan for their family, and see them get ahead in life right? Well this is not always the case.

    In the past there have been clients who have gone guarantor for someone, only to find at some point they have not made repayments on the loan, leaving the guarantor responsible for the debt. Sometimes the guarantor is unaware the repayments are not being made. It is when they are refused credit themselves that they realise payments are late and their credit file has been tarnished.

    – What is a guarantee?

    When people seek approval for a loan, a lender can sometimes require a potential borrower to provide a guarantee if they feel there may be some doubt as to whether the loan will be repaid. This sometimes occurs when the potential borrower has no credit history, or a bad credit rating, or perhaps an inadequate savings record.

    Often it is a family member, and generally a parent who is asked to guarantee the loan. The guarantor agrees to be responsible for repayments on the loan should the borrower fail to make them and this is including all interest, charges and fees that are due to the lender.

    – What can go wrong?

    Well a lot actually. Number one being the borrower fails to keep up with their repayments.

    Repayments which are more than 60 days late are listed as defaults on people’s credit files. The default would be listed on both the borrower’s and the guarantor’s credit file. Once somebody has a bad credit rating, it can be very difficult to obtain further credit. Most of the major banks will reject loan applications when people have defaults on their credit file. It can be difficult to even obtain a mobile phone plan.

    Worst case scenario if repayments are not made, is the bank begins to use the property the guarantor used as collateral, to recover lost debts. There is a danger the guarantor can lose their home. Those people who were so close to financial freedom are now facing debt, and a shaky retirement.

    According to the Consumer Credit Legal Centre NSW, there are many negative aspects to making the decision to go guarantor:

    REMEMBER: You do not get anything out of giving a guarantee!
    You do not get:

    •Any rights to any of the goods or property the borrower is purchasing with the loan;

    •A positive credit record;

    •It will not make it easier for you to get a loan for yourself;

    •It will not necessarily make it easier for the borrower to get a loan in the future.

    They suggest alternative ways to help out your children or family financially without having to guarantee a loan.

    “If your child asks you to guarantee a car loan for example, consider some alternatives. Perhaps you could give them an interest free loan of a few thousand dollars as a deposit, or offer to match their savings if they wait a few months, or just talk them into a cheaper car. If the loan is for a family business, talk to your accountant. Is there another way of obtaining the required funds? If a guarantee is absolutely necessary, is there some way of minimising the amount of the guarantee and/or the risk that it will be called upon?” the Centre says.

    – How to make an informed decision

    In the case of buying property, going guarantor can make a huge difference to the family member’s financial future by allowing them to break into the housing market.

    The most important question to ask is: Could we make the repayments on this loan should our family member be unable to?

    The second step for potential guarantors to make could be to seek third party and or legal advice prior to any agreement being made. This is to be able to make that calculated risk – and yes it is a risk, with the help of someone who doesn’t have a vested interest in the outcome (like the borrower or lender).

    The Sydney Morning Herald’s Personal Loans Smart Guide provides some other points to consider when making this decision:

    •How much is being borrowed?

    •How responsible is the borrower?

    •How stable is their employment?

    •Does the borrower have any other means of repaying the loan should he or she fall ill, be injured or become unemployed?

    •Can I afford to repay the total sum of the loan?

    Guarantors can insist borrowers have adequate insurance to cover anything that may go wrong during the term of the loan, such as life insurance and income protection insurance.

    It is also important to be clear about the amount that will be guaranteed, and that there is an ending to the time period of the guarantee.

    They should also ask that a copy of all bank statements be provided to them during the course of the guarantee.

    It is true there are many cases of guarantors helping out family members successfully, with the whole event posing no danger to their own homes or to their credit rating. But in this instance, it is a case of, when in doubt – don’t.

    – Does the borrower have a bad credit rating?

    As an alternative to using a guarantor, the borrower could look at repairing their bad credit rating. The problem is, many people who attempt to have defaults removed are told by creditors they can have them marked as ‘paid’ but that listings never get removed.

    But if the borrower has a bad credit rating due to listings which have errors, are unjust or simply should not be there, they do have right to have those inconsistencies removed. It may be worthwhile for people with a damaged credit file to seek the help of a credit repairer who can assess whether they are suitable for credit repair. The borrower could have their credit file defaults completely removed, and negotiate with creditors on their behalf. The success rate is generally higher, and it could mean the borrower is able to apply for a loan on their own terms, without the need for a guarantor.

    For more information on credit repair, contact MyCRA Credit Repairs – www.mycra.com.au or phone toll-free 1300 667 218 to speak to a consultant.

    Image: Ambro / FreeDigitalPhotos.net

    Image: vichie81 / FreeDigitalPhotos.net

  • Online identity fraud numbers doubled in four years

    The Sydney Morning Herald recently reported one in 10 Australians who use the internet have lost money to online identity fraud over the past year, with those losses reported to total $1.286 billion. The story, titled ‘Online ID fraud losses explode to $1.3bn a year’ featured a survey of 2510 Australians conducted in June by Galaxy Research, for Authentification Service company VeriSign.

    Identity crime is getting quite a lot of attention in Australia lately, with Channel 10’s 7pm Project running a story on identity theft this week. The Government also recently reported survey results on identity theft which reveal 1 in 6 Australians may be affected or know someone who has been affected by identity theft or misuse.

    If the VeriSign Online Fraud Barometer figures are an accurate reflection of identity fraud numbers in Australia – the figures have massively jumped from figures reported by the Australian Bureau of Statistics in its Personal Fraud Survey conducted in 2007. This survey (conducted with over 16,000 Australians) found just over 800,000 people have been victims of personal fraud, with combined losses of $977 million. These figures were across the board for fraud, including but not exclusive to internet use.

    The 2007 ABS figures represented 5% of the population. This new survey demonstrates a doubling in identity theft numbers for the internet alone to 10% of the population in just 4 years.

    This escalation in identity fraud numbers would be a direct result of an increase in internet use.

    Figures from 2008-9 from the ABS on the use of internet in Australian households showed 72% of households had access to a computer. It will be interesting to see what statistics on household internet use will arise from the 2011 Australian Census.

    People are increasingly conducting their social lives, their finances and their business on the internet. So, the freeing of information leads to increased opportunity for criminals.

    The government’s scamwatch website has extensive information on current scams that are plaguing the internet. There are so many forms of scams to be wary of out there, it is frightening.

    Cyber security consultant Alastair MacGibbon, former head of the AFP’s High Tech Crimes unit, broke it down into four main ways people could have their credentials compromised online:

    1. Entering details such as credit card and banking information into a website that is run by crooks.

    2. Handing card details over to a legitimate site but they are then stolen from the site itself through a security flaw.

    3. Man in the middle attacks, where a legitimate site is infected by malware and credit card details are stolen from users as the transaction is underway.

    4. Having a virus planted on your own computer which sucks up credit card details and passwords and sends them to criminals.

    What is not known from the recent figures is how many of those identity fraud victims have had the crime impact their credit rating.

    Typically, when fraudsters take out credit in someone else’s name, the victim is not aware of the fraud immediately. Any kind of credit account (from mortgages and credit cards through to mobile phone accounts) which remains unpaid past 60 days can be listed as a default by creditors on the victim’s credit rating.

    So the fraudster could abuse someone’s good name all over town and it is not until the victim applies for credit and is refused, that they learn about the identity theft and subsequent fraud.

    Credit rating defaults remain on credit files in this country for 5 years. The effect of people having a black mark on their credit rating is generally an inability to obtain credit. Most of the major banks refuse credit to people who have defaults, or even too many credit enquiries, so it is really essential to keep a clean credit record.

    It is actually quite difficult to go about removing defaults from credit files, regardless of the source. Most creditors will tell people listings are only marked as paid if they have been paid and remain there for the required 5 years. But by law in Australia, if a listing contains inconsistencies the credit file holder has the right to negotiate their amendment or removal.

    To clear their good name, the identity theft victim needs to prove to creditors they did not initiate the credit – which can be difficult. Not only are victims generally required to produce police reports, but large amounts of documentary evidence to substantiate to creditors the case of identity theft.

    So as they say,prevention is always better than the cure.

    The Government’s Stay Smart Online website recommends Australians follow these 8 top tips for increasing their resistance to identity fraud, and avoiding the loss to their bank balance and potentially their good name:

    1. Install and renew your security software and set it to scan regularly.

    2. Turn on automatic updates on all your software, including your operating system and other applications.

    3. Think carefully before you click on links or attachments, particularly in emails and on social networking sites.

    4. Regularly adjust your privacy settings on social networking sites.

    5. Report or talk to someone about anything online that makes you feel uncomfortable or threatened – download the government’s Cybersafety Help Button.

    6. Stop and think before you post any photos or financial or personal information about yourself, your friends or family.

    7. Use strong passwords and change them at least twice a year.

    8. Talk within your family about good online safety.

    For people who already suspect they have had their good credit rating compromised due to identity theft, MyCRA Credit Repairs can possibly assist in removing defaults from their credit file. Call us on this toll-free number 1300 667 218, or visit our website for more information www.mycra.com.au .

    Image: photostock / FreeDigitalPhotos.net

  • Consumer debt struggles and solutions

    A recent survey revealed that about one in three Australians said they will struggle to repay their debts in the coming September quarter. If this many Australians have money problems, then more should be done to educate people on our credit reporting laws, and what can happen to people’s finances, should they end up with a bad credit rating.

    When things get bad enough that repayments are getting missed, people need to be aware of the cycle they may be getting themselves into.

    Black marks on people’s credit reports remain there for 5 – 7 years, and can severely hinder their chances of getting further credit, from mortgages to mobile phone plans.

    If people are struggling to make repayments, they need to take a pro-active approach to managing the solutions.

    It is human nature for people to not want to admit their failings, but it is important for people to realise that the choices they make with their debts today can affect them as far as seven years down the track.

    All forms of credit, from mortgage repayments through to our utilities bills have the potential to affect our credit rating should they get too far in arrears.

    Debt survey

    Credit reporting agency Dun & Bradstreet released its bi-annual debt survey recently. The survey revealed that almost one third of Australians will struggle to meet their credit commitments in the September quarter. It also revealed that 37 percent intend to use their credit card to purchase something they could otherwise not afford. Twenty-one percent say their household debt will increase over the next three months, and almost half say an interest rate rise in the September quarter would negatively affect their household’s finances.

    “…the reliance on credit for household purchases in spite of apprehension about their ability to meet these commitments is worrying, as an issue that can affect their future credit rating and ability to access credit – often when they need it the most,” Dun & Bradstreet’s CEO Christine Christian says.

    Credit reporting explained

    Current legislation allows creditors of any form to list a default on a person’s credit file when the repayment is more than 60 days late. These default listings remain on a person’s credit file for 5 years. In the current market, most major banks are currently rejecting loan applications because of defaults, and many even for excess credit enquiries. So anyone who wishes to obtain credit should be ensuring they sort out any debt problems before they escalate to default stage.

    Under current legislation, people can see what is reported about them on their credit file, by obtaining a free copy of their credit report every 12 months. They may contact one or more of the credit reporting agencies, Veda Advantage, Dun & Bradstreet and Tasmanian Collection Services and it will be posted to them within 10 working days.

    If people find defaults, writs or Judgments which they believe are unjust, contain errors or just simply shouldn’t be there, they do have the right to have them removed. Credit rating repairers can assist with this removal by negotiating directly with creditors on a person’s behalf.

    Solutions for debt to avoid a bad credit rating

    1. Contact creditors immediately. People may be able to negotiate either a short-term or long-term change to their repayments. Many creditors, especially the major banks have options available to struggling families to help them keep up with repayments. Many appreciate people keeping in touch and working out solutions everyone can live with.

    2. Put the spotlight on spending. Paul Clitheroe advises those who can’t make repayments to keep a spending diary for a week or two.

    “This will show you exactly where your money is going, and chances are you’ll find plenty of little-but-often outlays that quickly add up to much larger amounts. Cut back on these and you’ll free up money for repayments,” Mr Clitheroe says.

    3. Consider the difference between wants and needs. People
    should consider how many of the items they regularly spend money on are necessities, and how many can be sacrificed for the short term in order to ensure their long term financial future is safe? People could choose to live without life’s little perks – like the Foxtel account, magazine subscriptions, or eating out while they get on top of their credit issues.

    4. Downgrade if necessary. For people in serious financial trouble, it may be a matter of swallowing their pride and downsizing or selling the family home, or moving to cheaper rental accommodation until they get back on top of things.

    For people who have defaults, writs and Judgments which are unfairly disadvantaging them, and they feel they should not be there – they can contact MyCRA Credit Repairs. We permanently remove black marks from credit files.

    Image: nuttakit / FreeDigitalPhotos.net

  • Australia’s new credit reporting laws: what they mean for home buyers

    MEDIA RELEASE:

    14 July 2011

    Proposed changes to Australia’s credit reporting laws will give those home buyers who would otherwise not have been approved due to minor credit defaults more chances for finance, according to a national credit rating repairer.

    Director of MyCRA Credit Repairs, Graham Doessel says the ‘comprehensive credit reporting’ changes currently under review by the Senate Finance and Public Administration should help lenders gain a clearer picture of a home buyer’s suitability for finance, and should help to alleviate unfair ‘knock-backs.’

    “The problem with the information currently recorded on people’s credit reports, is that only negative data is displayed. There is no data showing any positive repayment history, the type of debt, or the outstanding amount. So utilities bills are treated the same as mortgage defaults. Currently we have hundreds of clients who are unable to secure a home loan due to being in default on phone bills – some for as little as $100,” Mr Doessel says.

    He says the future of credit reporting will allow lenders to make a decision for home loan suitability based on more extensive history of the borrower. The proposed ‘comprehensive reporting’ scheme would include:

    -the type of each current credit account opened (for example, mortgage, personal loan, credit card);

    -the date on which each current credit account was opened;

    -the limit of each current credit account (for example, initial advance, amount of credit approved, approved limit); and

    -the date on which each credit account was closed.

    This follows new legislation released by the Government early this year requiring lenders to prove the suitability of borrowers to make repayments before allowing access to further credit.

    Mr Doessel says on the other hand there will be some buyers who are disadvantaged by the changes, particularly those who have a tendency to over-inflate their suitability.

    “It will require home buyers to be truthful about the current credit they have taken out, and the limits on each account. The new system may reveal some people are considered to be over-extending themselves and are rejected where they normally would have been approved. But in my line of work, many buyers are absolutely suitable to service a home loan, but have small-time defaults which hold them back.”

    “The other group that will be disadvantaged are those who are late with their payments for major credit. Under the new laws, late payments to a regulated NCCP credit provider such as a bank can be recorded as such, regardless of whether the late payment gets to default stage. Utility providers are not regulated in the same way, so normal rules for defaults will apply,” Mr Doessel says.

    He says the new laws will mean it is more important than ever for people to request regular updates on their credit report.

    “With all the new data available, there will be more opportunity for errors to occur. People should obtain a free copy of their credit report every 12 months from one or more of the credit reporting agencies in Australia, to ensure their file does not contain any inconsistencies,” he says.

    Mr Doessel says if people find information listed on their credit file which they believe is in error, is unjust or just shouldn’t be there, they do have the right to have that information rectified. He does say however, that it that can be a difficult process for the individual.

    “Navigating credit reporting legislation and negotiating with creditors is not easy. Unfortunately in most cases, if people attempt to remove the default themselves they can do more harm than good by not understanding the process fully, almost like trying to defend themselves in court. They might do OK, but they only get one shot at it and if they don’t get it 100% right, they will be unsuccessful. There is no appeal in most cases,” he says.

    Contact www.mycra.com.au for more help with obtaining a credit report and credit repair.

    /ENDS.

    Please contact:

    Lisa Brewster – Media Relations

    0450 554 007  media@mycra.com.au

    MyCRA Credit Repairs is Australia’s leader in credit rating repair. We permanently remove defaults from credit files.

    Link:

    http://www.alrc.gov.au/publications/55.%20More 20Comprehensive%20Credit%20Reporting/models-more comprehensive-credit-reporting

    Image: Danilo Rizzuiti/ FreeDigitalPhotos.net

  • Australia’s identity theft prevention improving

    It seems the nation has ramped up its focus on identity theft. We are more fearful of this crime than we are of a terrorist attack, and this is due in part to recent global data breaches which have directly affected the security of Australians. It is also due to the long lasting effects of identity theft and the difficulties that can ensue with our credit rating.

    Improvements occurred to our national strategy on identity theft this week, with the Attorney-General, Robert McLelland announcing two more states have signed on to the Government’s national Document Verification Service (DVS). This service allows authorised government agencies to cross-check identity documents to prevent identity theft or fraud.

    Identity theft occurs when someone uses our personal details without our knowledge for the purposes of fraud. It is occurring more readily than ever with the mass use of technologies such as the internet, social networking, i-phones and credit cards.

    Nowadays we conduct so much of our financial and personal business online and via our phones. When we shop online – we give over passwords, personal details and credit card details. When we want to catch up with someone, we do it via Facebook or Twitter – giving over details like where we are, who we’re with, when we are away from home.

    The reason we do all of this is because it is so darn convenient and fun. Our relationships can change, improve. Sometimes jumping online to pay our bills or pick up some birthday presents can be the only way we have time to get those things done nowadays.

    Unfortunately, it is also a convenient way fraudsters can extract details which may be used in order to set up fake identification in our name. Criminals may only need a small amount of very precise information about us to go about requesting ‘replacement’ copies of our documentation, or to create a fake document that can all be used to obtain credit in our name.

    Apart from the initial monies which may be lost due to fraud, the major consequence of identity theft is the destruction of our credit rating. A bad credit rating means most people are black listed from obtaining mortgages, personal loans, credit cards and even mobile phone plans for the term of the listing which is 5-7 years. Any way the Government can improve its system to protect people from this kind of fraud should be well received.

    This week, Victoria and Western Australia joined the rest of Australia in using the DVS, which Mr McLelland says will allow documents commonly used as proof of identity to be quickly checked electronically by the issuing agency.

    “For example, if you are using your Australian Passport as proof of identity to apply for a copy of a NSW Driver License, the NSW Roads and Traffic Authority will now be able to instantly verify the authenticity of the passport with the Australian Passport Office.  This ensures that documents haven’t been cancelled or personal information falsified.” Mr McLelland says.

    He says the purpose of the DVS is purely to allow authorities to verify document authenticity, and no information will be retained on any central database.

    “A number of State and Territory and Commonwealth Government agencies are already using the system. It’s already possible to verify the validity of Australian-issued passports, visas, and birth certificates and driver licenses from other States and Territories through the DVS,” he says.

    However, according to a recent article by CRN Magazine’s Liz Tay, an audit conducted last year by the Australian National Audit Office found the $28.3 million service had “significant problems” and was rarely used.

    “Auditors reported that the DVS performed less than ten transactions a day – well under initially expectations of one million a day – and was weighed down by issues with timeliness and accuracy,” the article says.

    This comes as the Government released results from an identity theft survey last week which showed 1 in 6 Australians have been or know someone who has been a victim of identity theft or misuse in the past 6 months.

    Let’s hope the government takes the necessary steps to improve its system to ensure it is genuinely going to make progress in the fight against this ever-growing war on identity crime.

    Suspect identity theft? Visit the MyCRA Credit Repairs website for help with what to do and how to repair your credit rating following identity theft.

    Image: Salvatore Vuono / FreeDigitalPhotos.net

  • Caught affluenza? How it can affect your credit rating health

    Affluenza is a disease of the 21st Century that can make us sick, and it can make our credit file sick with it –pulling us into a crazy cycle of spending and debt. Many of us are struggling to stay happy under a pile of ‘things’ and a pile of debt.

    The Wikipedia explanation of affluenza refers to it as “a painful, contagious, socially transmitted condition of overload, debt, anxiety and waste resulting from the dogged pursuit of more.”

    It is the disease of consumerism and it is being fuelled by big corporations urging us to buy more, persuading us with clever advertising aimed at selling to our emotions. It drives us to work crazy hours leaving no time for ourselves and our families. It drives up the mental health problems, the suicide rates, the divorce rates, the drug addictions, fraud, the stress related health problems – all these things seem to be a curse of living in the 21st Century in the Western world.

    Recently Fran Sidoti from SavingsGuide.com.au posted an interesting article about this topic titled Affluenza, And What It Might Mean For You. She says it starts by wanting a big house, and then all of those things that go in it, and with it – but that when we have everything, we are still not happy. She suggests we take a step back and employ old-fashioned values like “building a strong family, especially with an awareness of role models like grandparents who wouldn’t recognise affluenza if it bit them. A respect for hard work and the money it earns is crucial, as is emphasis on philanthropy and charity.”

    Australians Clive Hamilton and Richard Denniss’ book, Affluenza: When Too Much is Never Enough, poses the question, “If the economy has been doing so well, why are we not becoming happier?”

    Here is an excerpt from that book:

    “Our houses are bigger than ever, but our families are smaller. Our kids go to the best schools we can afford, but we hardly see them. We’ve got more money to spend, yet we’re further in debt than ever before. What is going on?

    The Western world is in the grip of a consumption binge that is unique in human history. We aspire to the lifestyles of the rich and famous at the cost of family, friends and personal fulfilment. Rates of stress, depression and obesity are up as we wrestle with the emptiness and endless disappointments of the consumer life.

    Affluenza pulls no punches, claiming our whole society is addicted to overconsumption. It tracks how much Australians overwork, the growing mountains of stuff we throw out, the drugs we take to ‘self-medicate’ and the real meaning of ‘choice’. Fortunately there is a cure. More and more Australians are deciding to ignore the advertisers, reduce their consumer spending and recapture their time for the things that really matter.”

    How many of us know someone who has gotten really sick – so sick that they lose everything – the house, the car, the job. If they are lucky enough to survive it, they always seem to have this new-found view of money. They often make that life changing decision to cut back on all those material things. They say they appreciate that the real joy in this world comes from spending time with family and friends and also dedicating some time to themselves.

    A new perspective on credit

    We should think of our credit file as a mirror on our finances. It can reflect our assets, our good history, but it can also reveal our financial shortcomings. It can be a reflection of our inability to stick with something, our disregard for repayments and it shows the financial potholes we fall into that are sometimes impossible to climb out of.

    How healthy are we looking?

    It is perfectly okay to use credit, as long as we make it work for us. We should use it to enhance our lives so that we can spend time with the ones we love, or to really improve our quality of life.

    Maybe we throw that long sought after holiday on the credit card and take the family away? Or take out repayments on an educational course that will change our working lives forever? Or perhaps we do buy a home, but after years of good saving. One that fits all the requirements of what we need, rather than what we want. A home we don’t have to work 24/7 to pay off because it is priced within our means.

    What we shouldn’t do, is spend money we don’t have, on things we don’t need, and ultimately find ourselves with what we don’t want – debt, unhappiness and a bad credit history.

    A bad credit rating can completely change our financial situation. The black marks placed there by creditors show up on our credit file for 5 years. Bad credit can limit our choices and can perpetuate the debt cycle by leading us to choose loans with higher interest rates and more fees, so the struggle to make repayments can be even harder.

    A clean slate

    If we want to try and start again with credit, it may be possible to wipe the slate clean, particularly if our bad credit rating should not be there.  Firstly, we can obtain a  free copy of our credit report from one or more of the credit reporting agencies, Veda Advantage, Dun & Bradstreet and Tasmanian Collection Services (TASCOL). If after checking our credit file we find inconsistencies, we may be a good candidate for credit repair.

    A credit repairer can work with creditors on our behalf to completely clear our credit file of all defaults, clear-outs, writs and Judgments which contain errors, are unjust or just should not be there. This means we no longer have a bad credit rating, but a completely clear credit file, giving us the financial freedom to use credit whenever we need to.

    The rest is up to us.

    Visit MyCRA’s website www.mycra.com.au for more information on credit repair.

    Image: Salvatore Vuono/ FreeDigitalPhotos.net

    Image: photostock/FreeDigitalPhotos.net