MyCRA Specialist Credit Repair Lawyers

Tag: credit worthiness

Australians on ‘credit-collision course’ without better education.

Media Release

Australians on ‘credit-collision course’ without better education.

15 October 2013

A consumer advocate for accurate credit reporting hopes the introduction of a public scoring system from Veda Advantage will be the catalyst to boost dangerously low credit awareness and reduce the likelihood of credit disasters following the implementation of new Privacy Laws next year.

Graham Doessel, CEO of credit repair company MyCRA says the Veda credit score is calculated from interpreted data at Australia’s biggest credit reporting agency, Veda Advantage – and has up till now been used by many lenders to assess credit worthiness.

“This information is now available to consumers, and this is a positive step in terms of transparency,” Mr Doessel says.

“But what I am most hoping will happen, is that more Australians will find this new number an easy and attractive starting point to finding out more about managing their own credit-worthiness.”

He warns if we don’t facilitate credit-savviness now, possibly millions of Australians could be severely disadvantaged come March 2014 when new data sets are available on Australian credit reports.

“The need for knowledge is going to be greater next year, as more people are going to get caught out with a bad credit score, and be scratching their heads to understand why,” he warns.

Recently Veda Advantage released results of its analysis of 300,000 VedaScores with consumer research of 1,000 Australians, and found that an astounding 80% of people had never accessed their credit report.

“…despite 15% of Australians being at risk of a credit default being recorded on their credit report in the next 12 months, considerable lack of awareness exists about what a credit history is, or how a poor credit report can impact chances of getting credit from lenders,” Belinda Diprose, Veda Marketing Manager says.

Mr Doessel says it demonstrates an alarming rate of ignorance in the community.

“It’s not really the fault of consumers. In my opinion there has not nearly been enough emphasis on public credit education right across the board up until quite recently,” he says.

Mr Doessel says there are some important basics about their credit rating that Australians should know.

5 Things You Need To Know To Manage Your Credit Worthiness.

1. You don’t have to pay to see your credit file, just your credit score.

In most cases you can access your credit file for free annually from all of Australia’s credit reporting agencies, and this will remain at a standard 10-day issue from receipt of application. It is important to apply for your credit file with each credit reporting agency – as you may have defaults with only one company. They are: Veda Advantage, Dun & Bradstreet, Tasmanian Collection Services, and Experian.

2. Your credit score rates you based on other credit-active Australians.

Your credit score based on Veda data will be available to you when you pay to see your VedaScore with your credit report, via this particular credit reporting agency. Veda Advantage holds roughly 16.5 million Australian credit files – so the data should be quite predictive of your overall credit worthiness in comparison to other credit-active Australians. If you are applying for credit in the near future, this credit score could be important to know.

3. There are several factors that make up your credit-worthiness.

Items such as negative credit listings (defaults, Court Writs, Judgments and Bankruptcies); number of credit enquiries and the type and size of credit requested in your past application can all impact your credit worthiness.

But there are other pieces of information about you which also have a bearing on your credit score – including your address; your age; how long you’ve lived at your current address; any business directorship or partnership you have, and the address of the business and length of time there.

Information on the VedaScore calculation can be found on Veda’s website.(1)

4. There will be more factors affecting your credit-worthiness next year.

As of March 2014, there will be 5 new data sets available on Australian credit reports, and this data will be used in any credit score calculation.

They are: repayment history information; the date on which a credit account was opened; the date on which a credit account was closed; the type of credit account opened; and the current limit of each open credit account.

5. Late payments will impact your credit file.

You will still be defaulted if you are more than 60 days late in making repayments to any Credit Provider, but in addition if you are more than 5 days late paying a licenced Credit Provider, you will be issued a late payment notation and this will show on your credit file from March 2014.

Repayment history information applies to credit such as loans and credit cards and is being collected NOW. Too many late payments will more than likely reduce your credit score significantly.

Mr Doessel says better credit education should eventually lead to fewer inconsistencies in credit reporting.

“Credit rating errors are quite common, and the onus of ensuring the credit file is accurate rests with the consumer – so better education across the board could result in more errors being ironed out in the credit reporting systems,” he says.

/ENDS.

For interviews please contact:
Graham Doessel – CEO Ph 3124 7133

For media enquiries please contact:
Lisa Brewster – Media Relations media@mycra.com.au

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

MyCRA Credit Repair 246 Stafford Rd, STAFFORD Qld

MyCRA is Australia’s number one in credit rating repairs. We permanently remove defaults from credit files. CEO of MyCRA Graham Doessel is a frequent consumer spokesperson for credit reporting issues and is a founding member of the Credit Repair Industry Association of Australasia.

(1) http://www.veda.com.au/yourcreditandidentity/check/vedascore/how-my-vedascore-calculated

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15/10/2013
How will open credit scores impact Australians?

Credit reporting agency Veda Advantage has just announced it will allow consumers to receive a copy of their credit score with their credit report. We look at how that will occur, and what possible impact that will have on consumers and also brokers and whether consumers will be better able to manage their credit worthiness using this ‘score’.

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

It was announced on Monday by Banking Day that Veda has ‘lifted the veil’ on credit scores and will allow consumers to be able to apply to see their credit score. Available to consumers for the first time, the VedaScore is a number between 0 and 1,200 that summarises information on your Veda credit file at a specific point in time. The higher the ‘VedaScore’ the better an individual is considered credit worthy.

For a fee consumers will be able to access their credit score along with their credit file.

This is over and above the standard credit report, which is still free from all of Australia’s credit reporting agencies once every year and is sent after 10 working days of application.

Despite being the credit reporting agency holding the credit files of the largest number of credit active Australians, Veda has in the past remained tight lipped about default numbers and credit statistics in Australia.

But this week they have offered some insight into credit activity, whilst releasing their ‘VedaScore’ product, by offering up a ‘Veda ScoreCard’ – which reportedly combines consumer research of 1,000 Australians about their finances with analysis of 300,000 VedaScores.

One of the biggest findings was that more than 2.3 million Australians are at risk of financial strife in the next year, with 27% (628,000) at high risk of credit default from something as simple as an unpaid bill, credit card or loan.

Veda’s survey also found some interesting facts about credit active Australians. Here are three we found most troubling about the credit active Australians surveyed:

93% know they have a credit record, but don’t know you can access it

81% are not concerned about their credit history

80% have never checked their credit history

Veda says the national average credit score is 749. But whilst Veda Marketing Manager Belinda Diprose, says in a statement to the media that making the VedaScore available to consumers for the first time “makes it easier for Australians to understand and manage their credit profile” – I am unsure how this will occur – as it hasn’t been announced that there will be a breakdown of that score and how it is calculated. There may be no way for consumers to understand what they can do to prevent their credit score from being reduced.

Yesterday Business Insider Australia featured an American report on How To Improve Your Credit Score. Whilst the U.S. system has a vastly different credit reporting system – what’s interesting is, the report gives us insight into how the U.S. ‘Fico’ Score is broken down:

Chart from Business Insider Australia’s report.

A similar breakdown could be useful to consumers looking to improve their credit worthiness or prevent decision making which reduces their credit score.

How will the VedaScore impact brokers?

Today we were quoted in The Adviser in a story about the Veda Credit Score.

Graham Doessel, chief executive officer of MyCRA Credit Rating Repair, said brokers should use the score to select the appropriate loan and lender for their clients, cutting back on rejected loan applications.

“Being able to see the credit score would be invaluable to brokers,” he told The Adviser. “It will make their job much easier, because they can have an idea very quickly how the client is going to fare with particular lenders.”

Alex Shumsky from Loan Market Oakleigh also made an important point about credit scoring information in the same story:

[fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][Credit scoring] can be valuable provided the credit scoring is in line with that of the banks.

“You can submit one loan to one bank and fail on credit scoring then submit it to another bank and it gets approved, same deal, same info but they’ll score it differently,” he said.

It will still be up to brokers to match the right product to the right client – so whilst the VedaScore will be valuable in many cases, different banks will have different priorities and different scoring systems.

We also see it could bring new clients to brokers – those who have obtained their credit score but don’t know how to interpret it, or what the relevance of that score will be with each lender.

Brokers will still be quite necessary in terms of helping borrowers ‘test’ how their score rates against a range of available credit. What we don’t want to see in the future, are a great volume of borrowers ‘going it alone’ using their credit score, and then falling into the trap of worsening their credit score by generating excess credit enquiries.

So whilst revealing the score is great, we hope consumer education goes hand in hand with this product release.

For more information on your credit file, visit our main website www.mycra.com.au.

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03/10/2013
Veda credit scores: mystery still surrounds calculation

Press Release

Veda credit scores: mystery still surrounds calculation.

2 October 2013

The decision by Veda Advantage to offer credit scores to Australian consumers previously reserved for lenders has been welcomed by a consumer advocate for accurate credit reporting – as long as Veda clearly outlines how the score is calculated.

CEO of MyCRA Credit Rating Repair, Graham Doessel says in general consumers have been kept in the dark about how to best actively manage their credit worthiness.

“I believe every credit active individual has the right to know what their credit score is, but with that, they also need to know how that score is arrived at to positively manage their own credit decisions,” Mr Doessel says.

He says people believe if they pay all of their bills on time, their credit score will be high, but this is not always the case.

“There are a range of factors that go into the score calculation – and it has all been a bit of a mystery to consumers really which is not ideal,” he says.

Mr Doessel says largely consumers don’t even know they have a credit score.

“Most times it’s only when their credit score is lower than it should be to obtain finance with a lender that consumers even know they have been rated with a number attached to their approvability,” he says.

Veda Advantage’s Marketing Manager Belinda Diprose told Banking Day yesterday there was a low level of consumer awareness about credit reporting, with as much as eighty per cent of people having never checked their credit report.[fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][i]

Mr Doessel says currently the big issue with allocating a credit score under the current credit reporting system, is that the number is only calculated on negative data.

“It’s not balanced. An individual can have a few too many credit enquiries in a certain period, and perhaps apply for the ‘wrong’ type of credit, which will reduce their rating, and there is no consideration for paying bills on time to offset that information,” he says.

New Privacy laws to take effect March 2014 will provide extra information for lenders and Mr Doessel says this will deliver a bigger picture of credit suitability and more information from which credit reporting agencies can draw on to calculate a fairer credit score.

“Until then, any number of things could be shaving points off your score – consumers don’t really know for sure the full gamut of what may reduce it, and this needs to be made public knowledge now that the score is available and moving forward towards comprehensive credit reporting in March.”

Go to http://bit.ly/My-Free-Credit-File for more information on obtaining your credit score.

/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

MyCRA Credit Repair 246 Stafford Rd, STAFFORD Qld

MyCRA is Australia’s number one in credit rating repairs. We permanently remove defaults from credit files. CEO of MyCRA Graham Doessel is a frequent consumer spokesperson for credit reporting issues and is a founding member of the Credit Repair Industry Association of Australasia.

[i] http://www.bankingday.com/nl06_news_selected.php?act=2&stream=1&selkey=15549&hlc=2&hlw=

image: adamr/ www.FreeDigitalPhotos.net

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03/10/2013
Access to credit will fall with introduction of new credit reporting data – and it’s being collected now

Press Release

Access to credit will fall with introduction of new credit reporting data – and it’s being collected now.

27 June 2013

Credit numbers are expected to decline when more data is reported about Australian credit habits in March next year, and a consumer advocate for accurate credit reporting warns, some simple mistakes may mean it is your credit worthiness on the line.

CEO of MyCRA Credit Rating Repair, Graham Doessel says this is an important time to know about Australia’s credit laws, and to be careful with how you use and repay credit.

“Australian consumers are currently under the microscope with their repayments, and if they are more than five days late with their repayments to licenced Credit Providers, that is going on their credit record now for two years and will show up as of March next year,” Mr Doessel advises.

“In my opinion, this is going to trip up many Australians. With only a 5 day grace period proposed, it may mean many Australians are unnecessarily banned from credit due to simple billing mistakes, lost paperwork and other payment mishaps,” he says.

The prediction of reduced credit numbers has been echoed by Dun & Bradstreet CEO, Steve Brown at a recent Australian Banking and Finance Conference.

Publication Banking Day reported Mr Brown as telling the conference that a contraction in consumer credit will take place following the introduction of comprehensive reporting in March.

“Lenders will start to learn things about consumers that they did not know before, such as the number of late payments they make,” Brown says.

And so say Citigroup.

“Citigroup Australia’s country risk director for consumer, CLN Murthy, agreed that there would be a tendency to reduce credit limits after comprehensive credit reporting came in,” Banking Day reports.

Repayment information will be part of five new data sets to show up on your credit report as part of wide-sweeping amendments to Australia’s Privacy Act, which includes a new Credit Reporting Code of Conduct.

“Prospective lenders will be privy to your repayment habits – and the word is out that more and more information may be on the table going forward,” Mr Doessel warns.

Banking Day recently reported that Mr Brown and others in the consumer finance industry will be pushing for even more data to be included in the future.

“Brown said Dun & Bradstreet would like to see the inclusion of account balance data in credit files,” Banking Day reports.

The long term plans with respect to repayment history information is to be able to offset good repayment history against a default listing. The conference predicted that products and pricing structures could be developed for these borrowers.

In the meantime, Mr Doessel says there are some simple things credit-active Australians can do to make sure their credit-worthiness remains in-tact:

1. Pay on time, every time. Pay within five days of your bill’s due date to avoid a late payment notation. It doesn’t have to be a big amount to impact you. Too many late payment notations will probably mean you’re refused credit, or offered only a high interest rate.

2. If you can’t pay, actively seek help. There are new laws to help prevent you from being defaulted if you are under financial hardship, provided you get in early with your Credit Provider. So there is a new incentive to get in and work it out prior to letting your accounts go into arrears and copping a default listing.

3. Seek cautions credit limits. If you’re not using it, don’t have it is the general adage. If you take out a credit card or other line of credit, it’s probably not wise to opt for a lofty limit, but ask for an amount closer to what you intend to use.

4. Consider identity theft risks. Understand how lucrative your personal information is and take steps to keep abreast of how it can be at risk. New laws will allow you to place a ban period on your credit information if you believe you may be at risk of identity theft. Acting quickly may prevent credit file misuse.

5. Check your credit file regularly. With the new information available, it will be more important than ever to check your credit file. Many people don’t know you can do this for free annually through the Australia’s credit reporting agencies and a copy is sent within 10 working days.

6. Correct credit information which you believe is inaccurate, inconsistent or unfair. To offset the new information, new laws will make it fairer for those disadvantaged individuals to access and correct their credit report.

But Mr Doessel says there will still be a requirement to work within and have knowledge of credit reporting law when disputing an inaccurate or unfair credit listing.

“It is important to note, that Credit Providers and Ombudsman must act impartially and cannot advocate for you,” he warns.

He says you can start by contacting your Credit Provider yourself to alter incorrect information, or you can put your case for dispute in the hands of an advocate.

“You should take steps to rectify mistakes before the information has any bearing on a credit application you may make in the future,” Mr Doessel says.

“You should take steps to rectify mistakes before the information has any bearing on a credit application you may make in the future,” Mr Doessel says.

/ENDS.

Please contact:

Graham Doessel – CEO Ph 3124 7133

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

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

MyCRA Credit Repair 246 Stafford Rd, STAFFORD Qld

MyCRA is Australia’s number one in credit rating repairs. We permanently remove defaults from credit files. CEO of MyCRA Graham Doessel is a frequent consumer spokesperson for credit reporting issues and is a founding member of the Credit Repair Industry Association of Australasia.

Image: Victor Habbick/ www.FreeDigtalPhotos.net

27/06/2013