MyCRA Specialist Credit Repair Lawyers

Tag: credit rating repairers

  • Australian Privacy Foundation says new credit laws will work against consumers

    The Australian Privacy Foundation (APF) has come out swinging at the Federal Government’s proposed amendments to privacy legislation, which incorporates amendments to credit reporting law. During the Senate inquiry into the Privacy Amendments (Enhancing Privacy Protection) Bill 2012, the APF slammed the new laws as a “lost opportunity” to improve privacy, and specifically credit reporting practices. We look at the APF’s comments and what consumers should be concerned about in terms of these new credit laws for the health of their credit file, and ability to obtain credit in the future.

    By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs and www.fixmybadcredit.com.au.

    The APF’s comments appeared in a recent IT News article titled ‘Australian Privacy Foundation slams Privacy Amendments’.

    APF board member Nigel Waters told the Senate inquiry that the proposed bill would “significantly weaken” privacy protections for Australians and fail to meet current international best practice standards.

    “While we are impatient for reform, we sadly feel that there are so many flaws in this package that it should not be enacted,” Waters said.

    “It should be withdrawn for further work to address the many criticisms that have been made in submissions.”

    IT News says Waters’ argument to the inquiry closely followed those made by the organisation in its written submission to the Senate committee, in which the APF accused the Government of cherry-picking recommendations from a 2008 inquiry into privacy reform.

    Here is more from this story:

    The APF was especially critical of amendments to the credit reporting regime, which the organisation said could be used against consumers, rather than helping to meet responsible lending obligations.

    Richard Glenn, assistant secretary at the Attorney-General Department’s business and information law branch, told the Senate inquiry earlier that morning that the revised regime would give credit providers “a greater richness” of information from which to make judgements about whether a person is eligible for credit.

    But Waters said the provisions would only accrue a “major loss of financial privacy for uncertain benefit”.

    “Although it will help in some ways, the balance, we fear, will be detrimental to consumers,” he said.

    Members of the financial industry called on the Government to delay the introduction of the credit reporting regime until later than the September 2013 deadline currently expected, for fear of being unable to become compliant with included requirements.

    Whilst I am in favour of any new laws which will facilitate an ease of correction of credit reporting mistakes, I have echoed the concern over the “loss of financial privacy” many times. One aspect I have maintained concern about is the additional information which will be made available to lenders in the form of late payment notations.

    It seems ludicrous to give Creditors more powers to effect a credit rating in the form of late payment notations (especially when those notations may not be subject to the same rules as an official credit listing would be) when they are having trouble getting credit reporting right as it stands now.

    Late payment notations will be added to credit files by licenced creditors even if a bill is one day late. The notation will remain on the consumer’s credit file for 2 years. See more in this story: Access Denied… How late payments may ruin your home loan application.

    In this post I urge consumers to be on their guard with this new type of bad credit – late payments – and I predict it will have an impact on those people that otherwise should qualify for a loan.

    Initially lenders will probably err on the side of caution, particularly if the economy isn’t great and adopt a policy of exclusion rather than inclusion to the credit market.

    Many people will take a big gulp when they think about all the bills they have paid late – often more through accident than not having the money – which could now see their loan declined. Who says how many is too many late bill payments? Would three a year be too many, or two in six months?

    And who says when this information will start being collected? I think if you want credit in the future (most of us) you should be on your guard now, be vigilant with making payments ON TIME every time to ensure these late payment notations don’t stop you from getting credit in the future.

    Despite new legislation giving consumers the legal avenue severely lacking in the current laws in some cases to be able to effectively dispute an unfair or incorrect credit file listing, it will continue to be up to the consumer to know the law to be able to apply it to their own case, and this is where credit rating repairers will continue to be needed – to close the gap and help enforce the legislation that Creditors are bound to comply with.

    Credit rating repairers will also continue to be needed – along with consumer groups such as the APF, to ensure that consumers are given a voice following the introduction of these privacy amendments. To put our hands up on behalf of consumers if needed and give accounts of any difficulties that may arise.

    Image 2: healingdream/ www.FreeDigitalPhotos.net

  • FOS explains nature of systemic errors by FSP’s which lead to mistakes on credit ratings.

    We examine a recent Financial Ombudsman Service (FOS) article which reports on instances of errors on consumer credit files in the finance industry. This type of systemic error can and does occur in every industry. This is why the presence of Industry Ombudsmen is vitally important to assist the resolution of disputes. A report like this also serves to illustrate the prevalence of credit rating errors across not only the finance industry but the credit industry entirely, and should serve to demonstrate the great need for assistance with credit rating inconsistencies in the form of credit rating repairers – who are helping clients to both recognise and make successful complaints about their credit file errors.

    By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs, and www.fixmybadcredit.com.au.

    The Financial Ombudsman Service (FOS) received a number of complaints in the first quarter of this year relating to serious credit infringements being listed by a financial services provider (FSP) on clients’ personal credit files.

    In the winter edition of its quarterly Circular publication, the Financial Ombudsman Service (FOS) reported (Systemic issues update – January-March 2012) on a number of complaints received in the first quarter of 2012 relating to serious credit infringements being listed by a financial services provider (FSP) on consumer credit files.

    Here is an excerpt from an article by Money Management on the FOS findings, titled FOS concerned over credit infringement listings:

    “FOS said it had contacted the FSP to advise that serious infringements had been listed even though the FSP had not sufficiently determined that applicants no longer intended to comply with their credit obligations.

    FOS also advised the FSP it would review whether serious credit infringement listings had been made against other customers without a reasonable basis to believe they would no longer comply with credit obligations.

    The FSP advised FOS that all the relevant disputes had involved third party tracing agents, but following a review of some of those listings FOS determined a high proportion had been made incorrectly and that the issue was systemic.

    In addition to asking the FSP to advise of the removal of incorrect listings, FOS asked the FSP to formally consider, case by case, any claims for non-financial loss from customers whose listing was made in error.

    In a separate but similar case, a complainant said his FSP had not correctly assessed his application for hardship assistance regarding a hire purchase agreement for which he had acted as guarantor.

    FOS found the FSP had listed a commercial debt on the applicant’s personal credit file that could not be considered credit under the relevant legislation and was therefore an inappropriate listing.

    Again, after a review FOS found a number of incorrect default listings and determined that the issue was systemic. FOS asked the FSP to correct the incorrect listings and to provide copies of its policies and procedures relating to default listing business guarantors on their personal credit files.”

    This report demonstrates it is important to champion for accuracy in credit reporting. A listing which has been placed incorrectly or unlawfully on a consumer or business credit file – or one that simply should not be there should be challenged. The consequences are generally bad credit for at least 5 years – so it is always a point worth fighting for.

    Most people put up with bad credit, even when it shouldn’t be there, because they find it too difficult to negotiate with their creditor. But having the correct information, going through the correct channels, with the right knowledge of legislation can make all the difference to a person’s chances of success at removing an incorrect listing.

    What a credit repairer will do for a client who wishes to repair bad credit, is look at their credit file and determine through investigation whether there is an avenue for removal of the credit listing based on legislation, and negotiate in the right way, with the right people and through the correct procedures for the listing’s removal.

    If you want to know more about credit repair – .visit the MyCRA main website www.mycra.com.au.

    Image: 89studio/ www.FreeDigitalPhotos.net

  • Credit repair industry body the Credit Repair Industry Association of Australasia to hold first Board Meeting Thursday.

    Media Release

    Credit repair industry body the Credit Repair Industry Association of Australasia to hold first Board Meeting Thursday.

    28 May 2012

    New industry body for credit rating repair, the Credit Repair Industry Association of Australasia (CRIAA) has scheduled its first Board Meeting this Thursday.

    The nine board members – who were ratified last Tuesday, will meet Thursday 31 May at 9:30am EST to discuss a range of topics which will move towards solidifying the CRIAA as an entity designed to deliver both credibility and voice to the credit repair industry and those promoting credit reporting accuracy in Australia.

    The board includes 6 credit repair industry members, and three finance industry members, including President of the Finance Brokers’ Association of Australia, Peter White. The meeting will comprise establishing formal positions on the board, and reviewing the ASIC-inspired draft Code of Conduct for the CRIAA.

    Board Member Graham Doessel – CEO of MyCRA Credit Rating Repairs says the drive of the Code of Conduct will be to develop a framework to ensure that members conduct themselves with high standards and ethics.

    “Credit rating repair is largely unregulated and some dodgy practices have caused the overall impression of the industry to at times be less than savoury,” Mr Doessel says.

    He says this impression overshadows the crucial role credit rating repairers play in correcting credit rating inconsistencies for consumers and the real place credit repair has in the credit reporting landscape.

    “The CRIAA Code of Conduct is a vital step to move the industry forward with credibility. It will provide some formal standards and minimum qualifications for members and cement a set of ethics that members can uphold,” Mr Doessel says.

    /ENDS.

    Please contact:

    Graham Doessel – Founder and CEO MyCRA Board CRIAA         Ph 07 3124 7133

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

    http://www.mycra.com.au/ www.mycra.com.au.blog

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

  • Credit reporting accuracy supporters choose a board to front new Credit Repair Industry Association of Australasia

    Media Release

    Credit reporting accuracy supporters choose a board to front new Credit Repair Industry Association of Australasia

    22 May 2012

    Nine board members for a new industry body designed to give both credibility and voice to the credit repair industry and those promoting credit reporting accuracy in Australia have been ratified today.

    The Credit Repair Industry Association of Australasia (CRIAA) held its second meeting today to ratify expressions of interest for board members, with 9 key players from inside and outside the credit repair industry now appointed to an interim board.

    The meeting was chaired by President of the Finance Brokers’ Association of Australia (FBAA) Peter White.

    The board now includes 6 credit repair industry members, and three finance industry members, including Mr White.

    “I believe the Credit Repair Industry Association of Australasia will ensure that consumer rights are at the forefront of decisions made by the Credit Repair Industry,” he says.

    The CRIAA has also been shown support from Ombudsmen, various external stakeholders and credit reporting agencies including credit reporting agency Dun & Bradstreet President, Tim Lord.

    “We are interested in the role D&B could play in regard to the Board Structure and or the Advisory Panel,” Mr Lord says.

    The CRIAA is now looking to establish formal positions on the board, with one of the first tasks of this being to establish a framework for a Credit Rating Repair Code of Conduct.

    The Code of Conduct is planned to be devised to Australian Securities and Investments Commission (ASIC) guidelines to ensure members conduct themselves with high standards and ethics.

    Foundation member and now board member of the CRIAA – MyCRA Credit Rating Repairs CEO Graham Doessel has seen the need for a strong and consistent foundation for credit repair clients in an industry that has been largely unregulated and lacking formal standards.

    “The introduction of best practice standards for the credit repair industry means reputable credit rating repairers can stand above dodgy operators and set the standard for the industry. This will allow the real issue of credit reporting accuracy for consumers to be given the voice it deserves,” Mr Doessel says.

    This is a viewpoint shared by new CRIAA board member, Colleen Halls from Fix Credit Australia.

    “I most wholeheartedly agree that the industry needs to be regulated and needs definitive standards set with minimum qualification requirements,” Ms Halls says.

    The CRIAA also seeks to have an influence on decisions of credit reporting law moving forward – whether directly or indirectly.

    “The aim is to increase the legislative voice for those who are ultimately responsible for ensuring credit reporting accuracy. This voice belongs to consumers and the credit rating repairers who act on their behalf,” Mr Doessel says.

    CRIAA Interim Board Members

    Peter White    (FBAA)
    Graham Doessel    (MyCRA Credit Rating Repairs)
    Colleen Halls    (Fix Credit Australia)
    Alicia Candido   (We Fix Credit)
    Ilias Bafas   (Clean My Credit File)
    Gavin Symes   (Credit Repair Australia)
    Andrew Bell   (Fix Bad Credit)
    Darren Brits   (Alpha Lending)
    Kevin Allen   (Educated Finance)

    /ENDS.

    Please contact:

    Peter White – National President FBAA Board CRIAA
    Phone: (07) 3847 8119  president@fbaa.com.au

    Graham Doessel – Founder and CEO MyCRA Board CRIAA
    Ph 07 3124 7133

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

    http://www.mycra.com.au/ www.mycra.com.au.blog

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

  • Credit Rating Repair Customer Costs – A Tale of Two Business Models

    “It was the best of times, and it was the worst of times.” Nothing could be truer for this time in the credit rating repair industry –we are at a turning point. It is time to examine the credit rating repair industry’s customer business payment models and decide going forward what models and methods are in the best interests of consumers, credit rating repairers and associated companies.

    By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs and www.fixmybadcredit.com.au.

    Consumer demand in recent years has demonstrated the true value of third party credit rating repair. Unfortunately much of the consumer recognition has been lost from a credibility standpoint under a wave of confusion over the credit rating repair industry’s customer business payment models. I examine the current credit rating repair business models in terms of best interest for consumers with a view to the application of some best practice standards for fee structure.

    In this post, I share my examination of credit rating repair customer costs with you and show how both business models can co-exist to benefit consumers, provided going forward, some recommendations are taken on board across both models to streamline transparency and fairness for consumers.

    In the article Credit Rating Repair Customer Costs – A Tale of 2 Business Models, I investigate the two customer payment business models current in the credit rating repair industry, ‘fee for service’ and ‘no win no fee’ payments.

    The fee structure for the credit rating repair industry must be investigated with a view to creating some best-practice reforms in the interests of consumers. The industry is ripe for criticism for confusing consumers due to the vast differences in fee structure across credit rating repair companies and lack of clear guidelines for advertisement and configuration of customer payments.

    Where the credit rating repair industry falls down, is that there are some inconsistencies in the way companies are delivering and advertising their services – some are not advertising their fees, some are charging way too much and delivering too little – and this creates mistrust across the board and tarnishes the reputation of what is actually a necessary service.

    Differing customer business models in the credit rating repair industry

    ‘Fee for service’ in the credit rating repair industry, means a fixed amount charged to a client for an agreed level of service. This is charged based on the level of service and or performance. This means that the fee structure is provided to the client up front, and as the client approaches each stage of service, the fee for that service will be due.

    The fee for service business payment model, by its very nature is more transparent, and applies principles which are in the best interest of the consumer – for these reasons:

    Upfront fees give the consumer more reassurance they will be told what they are going to get, how much it will cost, and because money has changed hands – the credit rating repairer will be bound to deliver what they have promised.

    This model allows the credit rating repairer to give better service to the consumer, through the increased level of commitment by the consumer.

    The introduction of a refundable assessment fee takes the benefits of fee for service to another level – by assuring those that enter into this business payment model are refunded any monies should they not proceed beyond the assessment stage of credit rating repair.

    The difficulty in a fee for service model is its restriction on consumers who can’t afford upfront payment, and can’t borrow due to a bad credit rating. At the same time, the fee for service credit rating repairer would likely impose less ‘defaults’ on consumer credit files.

    ‘No win no fee’ cost agreements are also known as conditional cost agreements. No win no fee broadly means that the client only pays credit rating repair costs if their claim is successful.

    The definition of a “successful claim” may vary between credit rating repairers. Ideally a best practice scenario should be where a successful claim is defined as a negative listing removed from the client’s credit file.

    When contrasted with fee for service, the win no fee business payment model has some significant disadvantages for consumers – particularly where the disclosure of fees and charges are concerned.

    Extra costs; and hidden costs dumped on consumers regardless of their success in credit rating repair can lead to confusion and anger over fees and charges.

    There is also the potential to skip vital steps in assessment which can lead to an inadequate volume of information prior to the engagement of credit repair – potentially leading to promises of credit repair not based in fact.

    Furthermore, should non-payment arise, the company may be forced to place defaults on credit files– a woeful situation that no credit rating repairer wishes to be in.

    Despite the disadvantages, the no win no fee business payment model has merit due to the ability to help those people who otherwise could not afford credit repair.

    In deciding which customer business payment model to adopt for the credit rating repair industry, I address other professions where these debates have occurred.

    The financial planning industry is on the cusp of streamlining a fee for service payment model across the entire financial planning sector. This has been in response to demand for better transparency to combat criticism of conflict of interest – and uses a ‘best interest’ approach.

    This consumer ‘best interest’ approach has strong merit when constructing any best practice customer payment model in the credit rating repair industry.

    In the legal arena, the no win no fee model popular in personal injury claims has been criticised for misleading advertising and hidden costs, something which the credit rating repair industry should keep in mind when making any reforms.
    With both business models having merits for credit rating repair, a number of recommendations across the board on both models would need to be instigated to create a level playing field for consumers.

    These include refundable upfront fees plus full disclosure of all fees, charges, terms and conditions on advertising. These changes make customer payments fair and simple to understand.

    These best practice reforms to business payment models would create transparency and credibility and would vastly contribute to providing a valid place for credit rating repair in Australasia’s credit reporting landscape in the future.

    The biggest criticism of the credit rating repair industry is that professional credit rating repairers are seen to be charging fees for what consumers can technically do for themselves.

    In reality, credit reporting can be a minefield for the individual to navigate. A good professional credit rating repairer can do much more for a consumer, and has a much greater chance of success, through knowledge of legislation and relationships with and ability to negotiate with creditors.

    This greater transparency will allow the industry to focus on the real issues within credit reporting which have previously been hidden under a cloud of heresay and confusion from outsiders.

    It can be said, that the footsteps the credit rating repair industry leaves during this time will allow credit rating repairers to march forward, revolutionising credit reporting itself in Australasia.

    Full article can be read on Graham Doessel blog here: http://grahamdoessel.com/wp/credit-rating-repair-customer-costs-a-tale-of-two-business-models/.

     

    Image: vichie81/ FreeDigitalPhotos.net

    Image: Stuart Miles/ FreeDigitalPhotos.net

  • How to help more clients… A former award winning broker shows why the millions of Aussies with bad credit are not lost

    Those brokers who are just in it for the money are few and far between in this market.  Those that have hung around despite all the market conditions thrust upon them must have a passion for the job, and a drive to see people realise their dreams of home or business ownership. We show you why more of the people you come across every day could end up being your biggest fans and clients for life.

    By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs and www.fixmybadcredit.com.au.

    As brokers, you are restrained by so many conditions which are simply out of your control in the current market.

    Left over from the Global Financial Crisis (GFC) are tighter lending conditions and nervous borrowers. Put this together with regulations for National Consumer Credit Protection (NCCP) compliance, and the result is unfortunately a diminished client base.

    Let’s face it – in this market, if you have to pick between a client with a perfect application or one which is slightly tarnished or impaired with bad credit (paid or unpaid), then it’s likely that you’ll choose the squeaky clean one…no headaches, no worries…and no extra indemnity insurance on a non-conforming loan.

    But most brokers do not know there is another way.

    In more than 9 out of 10 cases, bad credit history can actually be repaired. Engaging credit rating repair for a bad credit client gives the client the home at the best possible interest rates, and you the commission – and trail.

    Everyone wins.

    Plus, all parties are doing their part to help improve consistency in credit reporting through ensuring creditors enter listings fairly and accurately.

    For those who don’t know, here is how credit rating repair works…

    Bad credit can occur for a number of reasons:
    • Due to a dispute on a bill, such as a telephone or power bill;
    • Because of a change of address;
    • A major sudden upheaval such as illness or death;
    • Identity theft or fraud; or
    • Simple human error by the creditor

    The creditor defaults the consumer on one or more of their credit records held by the three (soon to be four) Credit Reporting Agencies in Australia.

    Defaults and other negative listing entries are strictly controlled by several pieces of legislation and several more codes of conduct. This aspect itself creates many grey areas and of course, is subject to interpretation.

    Consumers are blessed in Australia to live in a place where they are highly protected. Some of these protections are spelled out throughout the several thousand pages of legislation that works with and around Credit Reporting Law.

    Because the legislation is lengthy and involved, it gives those that are informed quite a lot of power. This knowledge is sometimes weighted heavily on the side of the creditor and leaves consumers with little ability to effect change in their own circumstances.

    For this reason, credit rating repairers have grown in popularity, as we are often the only people on the side of the consumer with the knowledge needed to fight the case on their behalf.

    As credit rating repairers we know this legislation. We review and consult it on a daily basis, looking to discover new and interesting methods to have bad credit set aside.

    During the process of discovery, we receive mountains of paperwork from your client’s creditors – which often include account statements, invoices, contracts and file notes.

    We review this documentation, constantly referring back to the legislation to formulate a case for your client. Once we are aware of any errors in the way the listing was added to your client’s credit report, we alert the creditor that the listing may be unlawful and request its immediate removal.

    At this stage it can sometimes get interesting, as many creditors genuinely believe that what they have done has been lawful and it’s up to us to educate them on where they have made errors.

    Occasionally, this can be a lengthy process and sometimes it may require the assistance and rulings of external governmental bodies.

    In more than 9 out of 10 cases, your client will be victorious. They can then go back to you to have their mortgage approved, their home loan settled, and their family can move into their very own home.

    I’m imagining a blue, round kiddie pool in the backyard, with a little sandy coloured puppy chasing the kids as they run up the slide to the cubby house, laughing and giggling all the way. That was my backyard a few years ago. My kids are all grown up now – one is about to get married. But those fond memories of us as a young family in our own home still remain.

    That is the power you have in your hands right now – to make someone’s dreams come true.

    Contact MyCRA Credit Rating Repairs tollfree on 1300 667 218 to speak with a consultant about our broker referral system.

     

    About Graham Doessel and MyCRA Credit Rating Repairs.

    Graham Doessel is the founder and CEO of MyCRA Credit Rating Repairs – Australia and New Zealand’s leading credit rating repair specialists.

    Graham’s origins are in finance, and he formed/owned the award-winning non-conforming brokerage “Mortgage Now.”
    Graham is a consistent spokesperson in the media for credit reporting issues in Australia and New Zealand.

    MyCRA Credit Rating Repairs, now in its fourth year of operation, has recorded an impressive track record of up to 91.7% rate of removal of inconsistent or inaccurate negative data from the Australian and New Zealand credit reports of both consumers and commercial entities.

    Graham and MyCRA Credit Rating Repairs are proud to be a part of developing a self-regulating framework for the credit rating repair industry through the lead role in the formation of a credit rating repair industry body.

    MyCRA Credit Rating Repairs is nominated for the 2012 Telstra Small Business Awards and the 2012 Start-Up Smart Awards.

  • Protect your credit file when co-borrowing for a home

    Got some savings, want to start in property but can’t afford a home loan on your own? You are part of a growing trend of Australians who are seeking out home buying ‘partnerships’ to get into the property market. We look at how this is happening, and what you should be aware of to protect your clear credit file when entering into this type of joint debt arrangement.

    By Graham Doessel, Founder and CEO of MyCRA Credit Repairs and www.fixmybadcredit.com.au.

    In Broker News yesterday, it was noted there has been an increase in the number of first homebuyers partnering up to buy property. BN reported research from Mortgage Choice revealing up to two-thirds of first homebuyers will be planning to buy with someone else. De facto couples, friends, relatives and even work colleagues have been entering into home buying partnerships  to be able to afford property:

    “Sharing a home loan commitment with one or more people provides borrowers with the opportunity to split the cost of the property and the associated expenses, so that loan repayments are noticeably less than what they would be if they were buying solo. Another benefit is if the combined funds equate to a deposit of 20% or more of the purchase price, it will negate the need for lenders’ mortgage insurance,” company spokesperson Belinda Williamson said.

    But with those benefits come some things to be wary of. Some of us are great with money and some of us aren’t. If one of each type get together – the potential for both to be financially damaged is greatly increased. As credit rating repairers, every day we meet people who need help with fixing credit rating issues due to the financial shortcomings of a partner.

    De-facto couples

    When de-facto couples decide to take out a home loan together, as with married couples there can be many ways that joint debt can go wrong. Living together can increase the risk of credit file damage, just through the sheer volume of credit accounts that one or the other or both needs to be responsible for. The lines can get blurred, and if things go bad, joint debt can be difficult to fix. Very often one partner ends up with a bad credit score, simply because the other person on the account has not made repayments to the account. 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 refused.

    Relatives

    Family joint debt can go really well, or really badly. There is generally a large element of trust. But as with de-facto couples emotion can get in the way of good business sense. People can make promises out of love without official documentation. If things go badly, it can not only damage the financial futures of the parties involved, but break down the family.

    Friends and work colleagues

    If the financial relationship is ‘strictly business’, it may be easier to separate the home loan from all other credit the individuals may possess. This is especially true if the property is purely an investment and neither person is living in the property.

    What happens if it all goes wrong?

    When we take out a home loan with someone else, and even rates, utility and phone accounts, we are very reliant on the partner to keep up their end of the credit repayments.

    A bad credit score due to a default (late payment of account past 60 days) lasts for 5 years, a ‘clearout’ listing is 7 years. During this time it is near to impossible to get another home loan, or credit card, or even a mobile phone plan while this negative entry appears on your credit report.

    So many times we hear clients say “I’m not sure how this happened – how can my clear credit file be damaged by something someone else did?”

    Unfortunately with any joint debt, both credit files are at risk if repayments aren’t made.

    How can I cover myself and my credit file?

    Here are some ways we can enjoy the benefits of getting into a home loan partnership without the pitfalls that could crop up for our credit file:

    1. Know about your new financial partner’s past credit history. People will do what they have always done. If they have financial skeletons in the closet we should be wary about leaving our credit rating at risk.

    2. Ask what debts they currently have. This will give you an indication of how they feel about money, and how much debt they consider normal to handle. Does this match with yours?

    3. Talk about paying bills. Do they always pay them on time? If not, why not? This will give you a good indication of how this person regards money and credit repayments.

    4. Ask what their financial goals are for the future. Do they match yours? If you intend to hold on to the property whilst the partner intends to sell in a few years to repurchase, are you prepared to pay them out? Will anyone be living in the property? How will you divide expenses on the property?

    5. Verify their answers about existing and past debt. Ask them if you can see a copy of their credit file. A copy of your credit report is free every year from one or more of the credit reporting agencies in Australia. It will be sent within 10 working days.

    6. Get all agreements in writing. Consider getting a solicitor to draft something up if necessary.

    “Clearly putting the ground rules in place from the start, preferably with the assistance of a solicitor drawing up a formal agreement, will go a long way to ensure all parties acknowledge their responsibilities and agree on unexpected contingencies,” Mortgage Choice’s Ms Williamson said.

    7. Leave emotion out of it. As much as you may be friendly with or even love the person you are buying the property with – people fall out. As much as possible try and detach your emotions while entering into the ‘business transaction’ you are making, so that if something does go wrong between you, your clear credit files remain intact.

    For more information on fixing bad credit or protecting your credit file, contact us at MyCRA Credit Repairs on 1300 667 218 or visit the main website www.mycra.com.au.

    Image: savit keawtavee / FreeDigitalPhotos.net

  • Keep your head when you follow your heart this Valentine’s Day

    Happy Valentine’s Day for tommorow, 14th February everyone…hoping cupid’s bow meets its target this Valentine’s Day and sends you someone special. If it does – and you are about to take the commitment road, here’s some important points you need to know about joint debt to prevent a bad credit score.

    By Graham Doessel Founder and CEO of MyCRA Credit Repairs and www.fixmybadcredit.com.au.

    Being in love and in particular new love can be the best feeling in the world. But let’s be honest, it’s not the most practical of states to be in. Sometimes our standards go out the window and we lose ourselves in the process of adding to our ‘relationship’ and creating an ‘us’. In this process it is important to remind ourselves of the important things about ourselves that should not change no matter who we’re with. Now going deep into that is probably another blog altogether. But let’s just concentrate on our finances and how we can maintain our good name and our clear credit file when we take our relationship to the next level of commitment with joint debt.

    Some of us are great with money and some of us aren’t. If one of each type get together – the potential for both to be financially damaged is greatly increased.

    As credit rating repairers, every day we meet people who need help with fixing credit rating issues due to no fault of their own really, but they have fallen under the financial shortcomings of a partner.

    When we take out any credit together, such as loans, utility accounts, homes and rental properties, we become very reliant on our partner to keep up their end of the credit repayments. Very often one partner ends up with a bad credit score, simply because the other person on the account has not made repayments to the account. 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. The relationship may even have ended years ago. A bad credit score due to a default lasts for 5 years, a ‘clearout’ listing is 7 years.

    So many times we hear clients say “I’m not sure how this happened – how can my clear credit file be damaged by 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 and create joint debt?

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

    1. Ask about your new partner’s financial past. People will do what they have always done. If they have financial skeletons in the closet we should be wary about leaving our credit rating at risk.

    2. Ask what debts they currently have. This will give you an indication of how they feel about money, and how much debt they consider normal to handle. Does this match with yours?

    3. Talk about paying bills. Do they always pay them on time? If not, why not? This will give you a good indication of how this person regards money and credit repayments. Ring any alarm bells yet?

    4. Ask what their financial goals are for the future. Do they match yours? If your new partner wants to blow all of their money on an overseas trip, but you want to save for a home – how will this work long term?

    5. Verify their answers about existing and past debt. Ask them if you can see a copy of their credit file (and versa of course). A copy of your credit report is free every year from one or more of the credit reporting agencies in Australia. It will be sent within 10 working days.

    If some of the answers to these 5 questions don’t leave you running out the door, but leave you wondering whether you are on different planets when it comes to money, it could mean you need to keep your finances separate for a significant period of time. For instance, just because you have bought a home together doesn’t mean you can’t keep other bank accounts, credit card and previous homes you own in your name only.

    It might also be a good idea to be the one responsible for all joint debt accounts, and to check those statements regularly for any issues.

    It is also important long term to order a copy of your credit file regularly. This will notify you of any problems before you apply for credit in the future.

    Just remember 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. Before you enter into any financial transaction, consider carefully how secure you would be if things did take a turn for the worse. Then you can relax and enjoy the buzz of falling in love.

    For help with fixing credit rating or listing errors, contact MyCRA Credit Repairs on 1300 667 218 or visit our website www.mycra.com.au.

  • 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.

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