MyCRA Specialist Credit Repair Lawyers

Tag: credit repairers

  • Not all credit repair law firms are created equal.

    Media Release

    20131021-MyCRA-Lawyers-Logo-medNot all credit repair law firms are created equal.

    6 November 2013

    One of the country’s top credit repairers has stepped up to fill a gap in the credit repair industry with the establishment of a law firm.

    Non-legal Director and well known consumer advocate for credit reporting, Graham Doessel says the establishment of MyCRA Lawyers has been motivated by an identified need to do more for consumers.

    “Credit advocates play an essential part in credit reporting, but the only way to truly cover all bases for consumers is to be part of the legal process,” Mr Doessel says.

    He says that in reality, when disputing a client’s credit listing, credit repairers can be met with varying responses and lengthy delays, and are not always taken seriously.

    “We believe that a law firm can provide strength in dealing with a Credit Provider,” he says.

    “Being a law firm allows us to go to the next level on behalf of our clients and bring real quality to our work – without restriction.”

    The credit repair industry has grown in popularity in Australia with tight lending conditions post-GFC.

    At last count 34 firms claim to be affiliated with credit repair or to repair bad credit.

    With that popularity has come criticism from bodies such as Ombudsman Services, other legal centres and even ASIC about questionable practices within the industry. Many have called for the formal regulation of the credit repair industry.

    Mr Doessel agrees more credit repairers should be held accountable, and that Regulation needs to follow.

    “MyCRA Lawyers believe it’s time to stand above the morass, be a leading firm and ensure that it acts to the highest standard.”

    He believes being a law firm with the duties and obligations this brings, will achieve this.

    Legal Practitioner Director and Principal Solicitor, MaryAnn Armstrong (JD. MEd. BEd ) says MyCRA Lawyers are one of the few firms who can legally offer Judgment removal services legally and professionally within the credit repair industry.

    “Preparing and submitting Court documents, preparing Affidavits – these are all actions which are legally required to be performed by a practising legal firm – and I would argue that any credit repair firm which is claiming to handle any Court matters such as Judgments and Writs should hold a practitioner’s certificate,” Ms Armstrong says.

    She also argues that credit repair is a grey area when it comes to the law –and those in the credit repair industry who are giving the impression of performing a legal service, could be doing so illegally.

    “The law states that any firm which acts on behalf of a consumer in legal matters is deemed to be performing a legal service, and must hold a practising certificate.”

    “Throwing around phrases such as ‘cheaper than a lawyer,’ ‘check if your debt is legal’ or ‘we provide legal removal services’ could be dangerous,” Ms Armstrong says.

    Whether or not Australia’s credit repairers would be required to cease operation in the future could come down to the perception of whether or not these firms were deemed to be crossing the line into a legal service.

    “It could come to light that many credit repair firms are currently operating as well-intentioned law breakers,” she says.

    Mr Doessel says both he and Ms Armstrong are keen to continue to speak out for consumers in matters of credit reporting accuracy.

    “With Australia’s new credit laws coming to fruition in March 2014, it will be incredibly important to be a voice for consumers in the credit reporting arena,” Mr Doessel says.

    He says MyCRA Law’s pricing model remains at a fraction of the cost of many other legal services, but it is not cheap.

    “Our clients are those people who are experiencing credit rating errors, omissions and inconsistencies, which are holding them back from obtaining major credit. We want our services to remain accessible, but we despise the predatory tactics from credit repair firms who target people who are down on their luck – so cheap and nasty is not for us,” he says.

    /ENDS.

    For interviews, please contact:

    Graham Doessel – Non- Legal Director MyCRA Law Ph 3124 7133

    MaryAnn Armstrong – Legal Practitioner and Director, Principal Solicitor MyCRA Law Ph 3124 7133

    For general media enquiries, please contact:

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

    MyCRA Lawyers 246 Stafford Rd, STAFFORD Qld

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

    MyCRA Lawyers…permanently removing defaults, Writs and Judgments from credit files.

  • Telcos to step up spend management awareness under TCP Code

    bill shockBILL SHOCK!

    We’ve discussed it frequently. We hear about it frequently as credit repairers. Next month, the Australian Communications and Media Authority (ACMA) is overseeing new guidelines under the Telecommunications Consumer Protection Code (TCP) designed to reduce the instances of bill shock, and hopefully the frequency of credit disputes over bill shock. The new requirements are about to take effect from 1 September. We look at what the new Code requires and what it will mean for consumers.

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

    Botched phone plans and lack of data usage monitoring has in the past left many Australians shell shocked over their mobile and internet bills, with bills so large many can’t pay up or refuse to pay up, leading to an increased rate of defaults.

    Consumers have been confused when it comes to data allowance – particularly on their smartphones, and this was a major focus following the ACMA’s Reconnecting the Customer inquiry – which found there was a real need for improvement in consumer protection in the telco industry in the areas of Critical Information Summaries, clearer advertising and improved complaint handling.

    In the past clients claim they have gone over their allowance really quickly, sometimes without realising it, or the plan they were put on was not appropriate for what they intended to use their mobile internet for. Often they have had great difficulty in cancelling the accounts or coming to a resolution with telcos over these billing issues.

    Sometimes consumers have reluctantly paid the bill, thought the matter was settled, only to find they were defaulted anyway, and others have just refused to pay the bill until they got some resolution. Either way, they have been faced with at least 5 years of bad credit from the episode unless they have been able to make a successful complaint.

    Last year, the Telecommunications Industry Ombudsman (TIO) surveyed its services. It counted 52,231 new complaints about telcos received between January and March 2012. Almost two-thirds were about mobile phone services.

    The TIO reports new complaints about over-commitment caused by inadequate spend controls increased to 4,282 in the January-March 2012 quarter, compared to 2,181 in the same quarter in 2011. In the same periods, new complaints about disputed internet charges increased from 981 to 2,823 (180 per cent).

    “It is well known that more internet browsing and downloads are now done on mobile phones and other mobile devices. With this change in consumer behaviour, we have seen complaints about excess data charges almost treble over the last year,” Ombudsman Simon Cohen said.  “The incidence of these complaints will reduce if consumers are only contracted for services they can afford, and where spend management tools such as notifications and usage meters are accurate and reliable”.

    SPEND MANAGEMENT TOOLS FOR TELCO CUSTOMERS

    From 1 September, 2013, spend management alerts, in addition to a range of new tools introduced for telco consumers following registration of the TCP code by the ACMA, will take effect. The changes include:

    • Residential customers on post-paid mobile and internet plans (with the potential for excess usage charges) will receive email updates when their data usage reaches 50 per cent, 85 per cent and 100 per cent of the amount included in their plan
    • Residential customers of the largest three mobile providers—Optus, Telstra and Vodafone—will also, from that date, receive SMS alerts when usage of their included value for calls and SMS reaches 50, 85 and 100 per cent.
    • The warnings at the 100 per cent usage mark must also include details of excess usage charges, which can be considerably higher than charges within the plan.

    ‘These notifications target customers most at risk of bill shock and represent an enormous industry reform by placing the power of information in the hands of consumers when they need it,’ said ACMA Chairman, Chris Chapman.

    Customers will not receive the warnings if they are on a plan which does not expose them to bill shock. This includes plans that are a pre-paid service, have a hard cap, or are an unlimited service, a dial-up internet service or are a shaped internet service, (i.e. which slows data rather than imposes excess usage charges when customers reach their data usage limit). The warnings are not mandatory for mobile plans launched prior to 1 March, 2012.

    The final element of the new TCP code, developed by Communications Alliance, rolls out in September 2014 when customers of the mid-sized and small telcos (less than 100,000 customers on included value plans) receive voice and SMS usage alerts to accompany their data alerts.

    Image: artur84/ www.FreeDigitalPhotos.net

  • Lax cyber-security makes us all vulnerable: Cyber Security Awareness Week 2013

    password securityIf your password is one of the most 1,000 common passwords, it could be hacked in literally seconds…

    Are you one of the millions of Australians who have a pretty basic password? We show you how important strong passwords and other security measures are to keep you, your credit file, your business and perhaps your country safe from cyber-attack. This week is Cyber Security Awareness Week 2013, hosted by Stay Smart Online. This is an Australian Government initiative, held annually in partnership with industry, community and consumer groups and state and territory governments. As part of this week we have been fortunate to speak with online expert Daniel Smith about cyber-security. He gives us a unique insight into the importance of cyber-security awareness for every ordinary Australian.

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

    You may have heard last month about the biggest ever global brute-force attack. You may have heard about it, but like many it may have gone straight over your head. But the ramifications of an attack like this are pretty important.

    The attack was on WordPress sites, which currently powers over 60 million websites and is read by over a quarter of a billion users every month. WordPress was attacked by a botnet of tens of thousands of individual computers. The botnet targeted WordPress users with the username “admin”, trying thousands of possible passwords.

    But online expert Daniel Smith warns this attack is definitely only a small taste of things to come.

    “Last month’s attack was orchestrated on a large scale, but this happens continuously on an individual basis on sites like WordPress, Joomla, Drupal or similar,” Daniel says.

    “I liken it to a locksmith with a whole set of generic keys – he can turn the keys in many doors until he finds one that fits. Hackers have common password ‘keys’, and they roll trials of these passwords until one unlocks the computer, and enables them to use the resources powered by the site which are far more than could be gained by a singular desktop computer,” he says.

    The ramifications for individuals and businesses who become part of a botnet are loss of data, loss of secure personal information and break-down of the site.

    “I know victims who have had to close their business down because they have lost so much information,” he says.

    But he warns, hackers don’t always delete the information on these sites, but may leave it intact, putting in files in back doors so that they can go undetected – making use of these resources again and again.

    “Hackers can on-sell information to cyber-terrorists or spammers, and can also on-sell the entire bot-net to be used in a brute-force attack that is capable of crashing a country’s economy,” he cautions.

    He says individuals with a WordPress or similar blog, and small companies could be at risk.

    “They don’t have the money to spend on security protection that a larger business would – and they are the ones that think their small site or blog is ineffectual, when in fact its resources make it a prime target for hackers,” he says.

    So just how easy is it to find these passwords?

    “I did a quick 5 minute search on the internet yesterday, and found a list of 6 million usernames and passwords that are out there. If I went searching for more in depth, there would be more there,” he says.

    Daniel says what’s gone wrong, is that the way we’ve been taught to create usernames and passwords is in fact broken. He says we need to make these changes to the way we run sites like WordPress:

    1. Use secure pass phrases. Come up with a unique scheme that is a minimum of 8 characters long – for example every 3rd vowel could be a number or symbol and you should always add some uppercase letters, numbers and any character that requires the shift key to type. Use multiple words in a pass phrase. You could use two unrelated words which are memorable to you.

    2. Use a different password for each account.

    3. Use a unique username – not the default setting. Never use ‘admin’ as a username.

    4. Minimise password login attempts. Restrict the number of attempts allowed to access the site, before the user is ‘locked out’, which prevents multiple attempts to crack the password.

    5. Include a 2-step verification plug-in. You can download a plug-in which requires 2-step authentification similar to bank requirements when logging in to the site. This is harder to infiltrate by hackers, but Mr Smith says many don’t use 2-step verifications because they seem inconvenient.

     

    “We may need to get a little inconvenienced to prevent what could be a business disaster, or in worst case scenario, a future global disaster,” he says.

    So where do we as credit repairers come in to cyber-security?

    Stealing passwords or personal information through these channels can lead to identity theft and potentially fraud. Hackers can on-sell your personal information to fraudsters who have identity theft as part of their repertoire.

    Information like dates of birth, account numbers, full names etc can be warehoused and used to steal your identity and take credit out in your name. Fraudsters have been known to go so far as to take out personal loans, credit cards and even mortgage homes in their victim’s name.

    Unfortunately fraudsters are never so kind as to pay this credit back – which leads to defaults on your credit rating. Most victims are unaware of this until they apply for credit in their own right and are flat out refused.

    For between 5 and 7 years you can be locked out of credit while your credit rating shows up someone else’s defaults.

    Unfortunately in the past it has not been easy for identity theft victims to prove they did not initiate the credit, particularly if they have no idea how they were duped in the first place. Often this sophisticated type of fraud is instigated by overseas crime syndicates who don’t leave much of a trail, or even if they do, can’t be prosecuted easily.

    SSO_Logo+WebPrevention really is key to protecting your credit file from this fraud – so spend some time and make sure the passwords on your site, or others that you use, are as secure as possible.

    To stay one step ahead of fraudsters, you can subscribe to Stay Smart Online Alerts – which let you know about security issues as soon as they unfold.

    Image 1: digitalart/ www.FreeDigitalPhotos.net

    Image 2: courtesy Stay Smart Online.

     

  • Privacy Awareness Week 2013 Privacy Law Reform

    Privacy Law Reform29 April to 4 May 2013 is Privacy Awareness Week 2013 across Australia. MyCRA Credit Rating Repair are once again proud partners of PAW, and 2013’s theme “Privacy Law Reform” is especially relevant to us as credit repairers and consumer advocates for accurate credit reporting. We are taking this week to discuss the huge changes coming our way since Australia’s Privacy Act (1988) was amended in late November 2012. We look at how individuals and businesses will be impacted by new Privacy Laws, particularly in our area of focus – credit reporting and credit law, looking towards the implementation of those laws on March 12, 2014.

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

    PrivacyWeek-Banners-R1 - 2013-3

    What is Privacy Awareness Week?

    Privacy Awareness Week (PAW) is an initiative of the Asia Pacific Privacy Authorities forum (APPA) held every year to promote awareness of privacy issues and the importance of the protection of personal information. Activities are held across the Asia Pacific region by APPA members.

    Why is MyCRA involved?

    Credit reporting is governed by the Privacy Act (1988) – so privacy issues are regulated and protected by this legislation. Credit repairers must be fluent in Privacy legislation in order to help consumers with their credit disputes.

    2013’s theme – Privacy Law Reform is a pertinent one for consumers.  MyCRA believes that every consumer should be educated on the changes coming in for them, and they affect every credit-active individual. We want to raise awareness of how an individual’s ability to obtain credit may be impacted (for better or worse) by these laws. We also want to demonstrate the changes that are coming in the way credit reporting information is handled, and how that will also impact the individual.

    What will change?

    The new laws will bring about changes in three main areas. (Courtesy of OAIC).

    The introduction of a unified set of Australian Privacy Principles (APPs). These principles will be introduced to replace the current National Privacy Principles for those private sector organisations covered by the Privacy Act and the Information Privacy Principles for Australian government agencies. There are a number of important changes with the introduction of the APPs, including in the areas of direct marketing, overseas disclosure of personal information and the handling of unsolicited information.

    The introduction of comprehensive credit reporting. These changes are designed to provide consumer credit providers with sufficient information to adequately assess credit risk while ensuring the protection of personal information, and to support responsible lending. The system will be underpinned by a new industry-agreed Credit Reporting Code of Conduct approved by the Commissioner.

    Enhanced powers for the Commissioner. These powers include enhanced powers to resolve investigations and promote privacy compliance with access to new remedy powers including enforceable undertakings and civil penalties. Also, for the first time, the Commissioner will be able to conduct Performance Assessments of private sector organisations to determine whether they are handling personal information in accordance with the new APPs, credit reporting provisions and other rules and codes. The Commissioner will be able to conduct these assessments at any time — an added incentive for organisations to ensure they are handling personal information in accordance with the Privacy Act.

    Credit reporting and Privacy

    Some of the areas of credit reporting which will undergo significant change will be:

    • New data on Australian credit reports – including repayment history information
    • Quality, security, accuracy and integrity of credit reporting information as set out in APP’s.
    • Improved ability to dispute credit listings
    • Ability to secure a credit file against identity crime
    • Penalties for breach of Privacy Act
    • A new Credit Reporting Code of Conduct – currently at Draft stage.

     

    Stay tuned every day this week to find out more about how Australia’s credit reporting law changes may affect you, your credit file and your ability to obtain credit.

    Image: Salvatore Vuono/ www.FreeDigitalPhotos.net

  • Is your New Year’s Resolution to buy a home? Check your credit rating doesn’t have a shady past first.

    new year's resolution to buy a homeMedia Release

    Is your New Year’s Resolution to buy a home? Check your credit rating doesn’t have a shady past first.

    8 January 2013

    As the calendar has rolled to the 2013 New Year, many Australians have declared their intentions to knuckle down and put together a deposit for a home – but a consumer advocate for accurate credit reporting warns – before people apply for a loan, they should check they don’t have a shady past with credit they are not aware of.

    CEO of MyCRA Credit Rating Repair, Graham Doessel says there are many reasons people can embarrassed with a bad credit rating and refused a home loan at the time of finance application, and the reason is not always as simple as failing to make payments on time.

    “People have got to be dedicated to be able to get together the minimum 10 per cent deposit that is generally required to buy a home today, but some people are getting to the credit check and are told they have bad credit history and they have no idea why,” Mr Doessel says.

    Prospective buyers may apply for a loan, only to be refused due to credit file defaults which show up on their credit report. Any creditor is able to place a default on a consumer credit file if a repayment is later than 60 days. Credit listings range in duration from 5 to 7 years depending on the listing type.

    Mr Doessel says home buyers do not always have bad credit because of something they have done wrong.

    “Paying your bills on time should, but doesn’t always guarantee a clear credit file. As credit repairers, we see a multitude of instances where the creditor has made a mistake and placed a default or other listing on the consumer’s credit file when it shouldn’t be there. Often it’s not until the credit file holder applies for credit that they are made aware of it, but at that time it’s too late, they often lose the home they are buying,” he says.

    “Credit file mistakes are common, and can be because of simple human or computer error but the end result is that the consumer is blacklisted from credit for at least five years unless they can prove the listing is unlawful.”

    Consumers can check their credit file for free every year, by requesting a copy from Australia’s credit reporting agencies.

    “It is good financial practice to request a copy each year, but there is never a more important time to make sure your credit report is accurate as BEFORE you apply for a home loan, so you don’t lose the home you have your heart set on. Credit reporting mistakes do happen, but the watchdog is you,” he says.

    If a default has been listed ‘unlawfully’ you have the right to request its amendment, or removal from your credit file.

    “If there is something amiss on your credit report, if you find have a shady past with credit that you believe is unfair, don’t let that one notation ruin your life. It’s not easy to dispute a credit listing, but if it shouldn’t be there, it’s a point worth fighting for,” Mr Doessel says.

    People can visit http://www.mycra.com.au/credit-file-request/ for help to get their credit report.

    /ENDS.

    Please contact:

    Graham Doessel – CEO Ph 3124 7133

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

    Ph 07 3124 7133 www.mycra.com.au www.mycra.com.au/blog 246 Stafford Rd, STAFFORD Qld

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

    Image: digitalart/ www.FreeDigitalPhotos.net

  • How to dispute a bill and keep a clear credit file

    What many credit repairers don’t want you to know…There’s a wrong way to dispute your bill. The wrong way can lead to bad credit history – leaving you unable to obtain credit for 5 to 7 years. Here is how you should dispute your telephone, internet, energy or basically any bill which you disagree with before it ruins your credit file.

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

    Customers who refuse to pay a bill because they believe it has errors are making a grave mistake that could harm their ability to get credit in the future.

    One of the most common mistakes people make which leads to bad credit history is not paying a disputed bill by the due date.

    Creditors make mistakes with billing all the time, otherwise however infallible they may like to think their system is, otherwise there would be no need for professional credit repair.

    It can be really difficult getting the matter resolved with some creditors. But no news is definitely not good news.

    Where many customers go wrong, is assuming just because they have spoken to someone on the phone about the bill, they are no longer obliged to pay it by the due date.

    Under current credit reporting legislation, an account which is more than 60 days late can be listed by the creditor as ‘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.

    Many clients dispute the offending bill with the company and made the mistake of leaving the bill unpaid well past the due date while waiting for correspondence from the company. Many are not aware they have incurred a default anyway, until they apply for credit in a different circumstance.

    These defaults remain on a person’s credit file for 5 years. Under current legislation, defaults generally don’t get removed from a 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.

    So it’s really important we don’t leave ourselves open to having a default listing slapped on our credit file, ruining our good name.

    Here is the process 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 date of all conversations, the name of each person you speak to and the nature of the discussion with each. Note any resolutions that were reached and ask that those be emailed or 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 always seek reimbursement at a later date, but this will prevent a default for that bill being listed on your credit file.

    5. If there is still no resolution, take the matter further, usually with the appropriate Ombudsman.

    So don’t assume anything or take someone’s word for it, get it in writing and preserve your clear credit file.

    If you already have bad credit history from a bill dispute that went wrong – it may not be all lost. The best way to fix your credit score is to seek professional credit repair.

    Australian credit reporting legislation allows for you to resolve any inconsistencies on your credit report. But the problem with attempting to dispute errors on your credit file with creditors yourself is two-fold. Without knowledge of the legislation, people almost invariably get caught in legal ‘loop-holes’ which see the default, writ or Judgment left on the credit file, or at best see the listing marked as ‘paid’.

    Both of these results DO NOT fix your credit rating because lenders still consider even a ‘paid’ listing as bad credit history. Secondly, by negotiating with creditors, people can also accidentally ‘alert’ creditors to any mistakes the creditor may have made in the initial method of credit reporting – allowing them to fix up their mistakes and negate the need to remove the credit file default which was placed in error.

    Good professional credit repair gives you the best chance at fixing your credit.  A credit repairer can help you get a free copy of your credit file, and go through the bad credit history with you. They can then use their knowledge of credit reporting legislation to see where any errors in credit reporting were made, and help to enforce the legislation that creditors are bound to comply with.

    If they are successful, you not only get help with removing errors from your credit file, but many times you are able to start off with a completely clean credit rating.

  • As confidence returns, home buyers need to fix credit problems

    Good news may be on the horizon for the Aussie mortgage market. Mortgage sales for January 2012 have revealed a significant return in confidence for home buyers. But with that renewed confidence should come a forewarning for home buyers about how to make the most of preparations of savings records, wages and stability through matching it with a credit ‘clean up’ for easier finance approval.

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

    According to AFG (Australian Financial Group), mortgage sales for January 2012 have soared above figures for last year. It released its AFG Mortgage Index last week in which it showed national mortgage sales increased by 40% this January compared to last year. AFG says the changes mark a return to more normal trading levels.

    Sales in Queensland were up 80.6% and in South Australia 84.5%, with other states showing significant uplifts compared to January 2010 ? WA (+ 37.4%), Vic (+25%), NSW (+14.5%).

    January also saw WA take over from NSW as the most popular state for First Home Buyers. Almost one in five new mortgages (19.1%) in WA was arranged for First Home Buyers compared to 14.0% in NSW. Through the second half of last year, NSW led the country as the most active First Home Buyers market.

    However NSW retains its position as the most popular state for investment, with 40.2% of loans there arranged for investment purposes, compared to 36.8% in Victoria, 34.9% in Queensland, 32.6% in Western Australia and 32.0% in South Australia.

    Although confidence might have returned, there will still be a significant number of home buyers who fail to realise their home ownership dreams due to a bad credit report. It is estimated there are approximately 3.47 million Australians who have a bad credit rating (negative listings on their credit file). (Veda November 2008).

    As credit repairers, we meet many people who seek help to fix credit problems, and astoundingly, many of those people should qualify for a home loan. It may surprise people to know that many prospective borrowers we see have significant savings records, or even currently own property and have good income. They can be knocked back for finance by a bad credit history that should not be there.

    Do you need a credit clean up?

    Many credit files contain errors or inconsistencies due to simple human error from creditors, or from creditors simply not complying with credit reporting legislation. Often it is not until people apply for a home loan that they find out about them. Even if people already own property, they can be banned from refinancing, investing, or from upgrading their home due to credit rating defaults or other credit file problems.

    Any negative listing – from defaults, to Judgments and even excess credit enquiries will stop most people from getting a home loan in this market, or force them into a high-interest loan, costing them thousands more in interest.

    Negative listings remain on a person’s credit file for 5 -7 years, depending on the listing type. These black marks can show up for outstanding bills as low as $100.

    Credit file errors

    A survey by Choice Magazine as far back as 2004 points to approximately 30% of the credit files in the survey likely to contain errors. That’s a staggering amount of credit file errors potentially out there.

    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.

    The nature of credit reporting is that there is much opportunity for human error and these errors are usually not uncovered until people go about checking their credit file. Often people are unaware of their responsibility to maintain the accuracy of their own credit file – and so they don’t find out about their credit issues until they apply for a home loan.

    Then, once people find problems with their credit file – they often find the process of removal of errors from their credit report difficult.

    What is the best way to fix credit problems?

    Current legislation does allow people to have inconsistencies removed from their credit file, but in reality many people are not successful when they attempt to fix it themselves.

    Often it is because they are not schooled enough in the legislation or can’t devote the necessary time to it to ensure a successful credit repair. Sometimes people who attempt to fix credit problems themselves can do more harm than good through lack of knowledge, or difficulty in negotiating with creditors or by alerting them too early to mistakes on the credit file.

    A borrower’s credit file is one of the key factors to home loan approval. People should not underestimate this factor.

    Make it right with a credit file check and credit clean up before you apply for a home loan

    It is important to get it right, and the onus is on the credit file holder to maintain its accuracy. House hunters can and should request a free copy of their credit file every year from one or more of the credit reporting agencies such as Veda Advantage, Dun and Bradstreet or Tasmanian Collection Services (TASCOL) if Tasmanian.

    A free copy of their credit report will be mailed to them within 10 working days. A creditor may have place a negative listing with all or one of these credit reporting agencies. If there are any inconsistencies, they should seek a reputable credit repairer for a credit clean up.

    ABS Statistics differ

    AFG statistics are currently projecting significantly more confidence than the latest data from Australian Bureau of Statistics figures shows, particularly in Queensland.

    The November Lending Finance Statistics show the number of owner occupied housing commitments in Queensland stayed flat in October to November, recording a 0.0% change in Queensland.

    We will watch avidly to see if data from AFG matches with the ABS’ review of January housing finance and lending statisitcs due out in March.

    For brokers, agents and property owners – rising mortgage rates in many states and particularly in post-flood ravaged Queensland, would be very good news indeed.

    Image: Danilo Rizzuti/ FreeDigitalPhotos.net

  • Helping clients save money through credit repair

    As brokers we are continually faced with meeting clients whose credit report lets them down. These clients stack up financially on all levels…until that last minute credit check reveals they have an adverse listing on their credit file.

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

    Many brokers who come across clients with a bad credit rating either turn them away or if they are otherwise suitable for finance, guide them into a more flexible non-conforming loan.

    But many brokers may be surprised to know it can be cheaper for the client to undergo credit repair  – and if the client identifies errors or inconsistencies in their credit report – it could ethically be the best option for the client.

    For instance, let’s calculate the figures on an average loan of $400,000 over 30 years, comparing non-conforming loan interest rate of 9.5% with a standard variable rate of 7%. The client would be paying a staggering $702.71 per month with non-conforming loan interest rates. They will be hit with $22,867.15 more in home loan repayments over the first three years of the loan.

    Credit repair would not be suitable for those people who demonstrate an inability to make repayments. But as credit repairers many times we find the client has errors on their credit report, or the listing is unjust – and that we can rectify. Often we can determine that the file can be completely cleared, allowing the client access to a whole range of loans they were previously unsuitable for.

    The popularity of credit repairers is due to a large volume of errors made by creditors on credit files, and a system of redress which is often difficult for the credit file holder to navigate.

    The number of errors on credit files in Australia is astounding. Many of our clients thought they had impeccable repayment histories and would have never dreamed they would end up with a default. Let me tell you mistakes do often happen. Sometimes simple human error by the creditor leads to defaults incorrectly listed.

    Whilst paying bills on time is the best way to ensure a clear credit file, it does not guarantee a clear credit report.

    Statistics released by the Australian Consumer Association (now Choice Magazine) from a study conducted in 2004 showed around 34% of the clients surveyed had credit files which potentially contained errors in some way.

    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.

    The nature of credit reporting is that there is much opportunity for human error and these errors are usually not uncovered until people go about checking their credit file. Often people are unaware of their responsibility to maintain the accuracy of their own credit file – and so they don’t find out about their credit issues until they apply for a home loan.
    Then, once people find problems with their credit file – they often find the process of removal of errors from their credit report difficult.

    Current legislation does allow people to have inconsistencies removed from their credit file, but in reality many people are not successful when they attempt to fix it themselves. Often it is because they are not schooled enough in the legislation or can’t devote the necessary time to it to ensure a successful credit repair. Sometimes people who attempt default removal themselves can do more harm than good through lack of knowledge, or difficulty in negotiating with creditors.

    One thing brokers can do to encourage a better transaction is to refer clients to us to have their credit checked prior to applying for finance. They can take advantage of their yearly free credit file check, which would uncover any problems with the credit file prior to finance application, and ensure the client is in the best possible position for qualifying for a loan. Plus a client does not generate a credit enquiry when they request a copy of their own credit file.

    Brokers can also potentially save thousands in lost commission by helping those that may otherwise be turned away to get a clear credit file.

    Once the credit file is repaired the client is then passed back to the referring broker to be fitted to the loan of their choice.

    For more information for brokers on the benefits of referring clients, contact MyCRA Credit Repairs or call tollfree 1300 667 218.

  • 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.

  • Consumer debt reduction: Watch out for new bank fees

    Our last blog post was about debt struggles and solutions –and how people can protect their credit file. Featured in this post were recent findings from Dun & Bradstreet’s bi-annual debt survey, showing one in three Australians will struggle to repay their debts in the September quarter.

    The Sydney Morning Herald recently published an article featuring this survey, titled ‘Australians still hooked on credit’. It reported that many people are still heavily reliant on credit to purchase something they could otherwise not afford, despite the assessment of their household’s financial outlook now being at a 20-year low. But the article reports some sections of the population are reducing their credit use. It reports Mastercard as saying:

    “The austere mood caused the annual growth in credit card numbers in Australia to slow to 1.76 per cent in the 12 months to May. Purchases made on debit cards jumped 17.3 per cent during that time as consumers sought more control over their finances.”

    If the downward trend to reduce credit continues, people will become more reliant on debit cards and Eftpos to make their purchases.

    But as the Herald Sun reports in its article ‘Banks are busy working on ways to replace income lost from fees‘, people may be penalised for this change. It reports a new Eftpos tax will result in an extra 10c interchange fee and 1c EPAL scheme fee increase on Eftpos transactions starting October 1, 2011. Here is an excerpt from this story:

    The company that runs Eftpos, EPAL, has given banks until
    next month to opt in to its new, higher interchange fee structure.

    “Banks are about to start charging for something they previously provided for free,” said Jost Stollmann, chief executive of a rival player in the debit-card payment industry, Tyro Payments.

    “In fact they supplied this service for less than free: they paid 5c each time someone used Eftpos.”

    “Now EPAL has reversed that subsidy and created a new 5c fee to acquirers, which will flow through to retailers and merchants.”

    The Australian Newsagents’ Federation say the new Eftpos fee
    regime will impose fees of up to 21c for each Eftpos transaction, up 110 per cent on existing fees.

    “No retailer can negotiate the interchange fee with his bank. The new EPAL regime is all about raising bank fees,” the federation says in a new advertising campaign.

    The story explains how banks have cut out exit fees on home loans, and many of the other fees that consumers have traditionally complained about, but have cleverly sought alternative ways of replacing the lost fees. It reports one way of recovering lost revenue from exit fees is to increase ongoing fees on home loans. The story reports fees in this area have increased on average around $75 a year since 2009. Also some banks have announced increased upfront fees on some of their variable home loans recently. The highest upfront fee increase was $600 on one Commonwealth Bank product.

    So consumers will have to bear the cost of reduced fees in some areas, with increased fees in others. If people want to refinance to a cheaper interest rate to save money, they won’t pay exit fees to leave that home loan – but they could pay higher upfront fees on many of the new loans they may want to switch to. Hmmm….

    Is the process of saving money and reducing debt just getting more difficult to navigate?

    How do we know the best ways to save money?

    For those who, despite all of the obstacles to success are determined to reduce debt – the best place to start is to get interested and updated on ways to save money. We encourage people to get educated about debt, and ways to avoid a bad credit rating, which can ruin people’s ability to obtain good credit for 5-7 years.

    The fact is credit is an essential part of being money smart in today’s society. Unfortunately we need credit. People can’t go back to wacking the money under the mattress. They simply cannot function without savings records and credit history in order to obtain major credit like mortgages and personal loans. So to succeed, it’s a matter of being educated about smart ways to use credit.

    There are a number of great places to start getting educated. We love the advice given on Australian blog Savingsguide. Also extremely informative is ASIC’s Money smart website. Of course, we can’t go past a trusted favourite like MSN Money.

    If people find despite their education on money principles, they still can’t get ahead due to the disadvantage of having credit rating defaults, writs or Judgments – it may be possible to start with a clean slate by having them removed. Not all credit files can be repaired, but those which contain adverse listings with errors, which are unjust or just shouldn’t be there are good candidates. Credit repairers completely remove defaults, writs or Judgments from people’s credit files, allowing people the financial freedom to choose the best interest rates, and financial products which are right for
    them. For example, people who are living with a bad credit rating who invest in credit repair can potentially save thousands on interest by the ability to select a cheaper interest rate. Contact us at MyCRA Credit Repairs for more information.

    Image: Salvatore Vuono / FreeDigitalPhotos.net

    Image: Ambro / FreeDigitalPhotos.net