MyCRA Specialist Credit Repair Lawyers

Tag: David Koch

  • Are you lying to yourself when it comes to credit?

    money liesIn this week’s ‘Make Credit Work For You’ post, we look at the lies we tell ourselves which see us taking on too much credit, or see us run into trouble with our credit file. Those lies can end up leaving us unable to pay, and blacklisted from credit for years to come. What should you be honest with yourself about when it comes to borrowing money? This post is inspired by David Koch’s recent article ‘Money lies you need to stop telling yourself’ featured on news.com.au. 

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

    According to Kochie, telling yourself financial lies is pointless. He says it’s time to toughen up and stop the lies, as these can cost us big time in the future.

    So, what things can we lie to ourselves about, that could cost us our good credit rating down the track?

    * As long as my job pays well, it’s OK if I hate it.

    Kochie says staying in a job that you hate, even if it pays well, means you don’t have your heart in it, there will be no commitment, no passion and your boss will eventually latch on.

    “Inevitably, you’ll be the first one to go in any redundancies and the one overlooked for any promotions,” he says.

    So before you apply for credit, especially major credit like a home loan – it’s important to understand the long term commitment, and consider whether the career you’re in is going to fulfil you for at least several years to come. In the early years of a loan, your repayments will be at their highest and it will be essential to put your head down and pay off as much as possible.

    Kochie says success comes easiest to those who love their job. So if you don’t – it might make sense to spend some time getting settled in a job you do love, before you apply for major credit.

    However, if you are unhappy in your job and are currently paying off a mortgage or other significant loan – it’s important you are really smart about how you change careers. Consider your loan first and foremost before you make any drastic career changes. You don’t want to be caught out unemployed and unable to pay your loan.

    * If I turn a blind eye, somehow my finances will work themselves out

    Burying your head in the sand is never a solution to your financial issues. They only snowball.  At this point in time in Australia, paying bills even one day late may directly impact your credit file, through licensed Creditors recording your repayment history information. Paying them later than 60 days will see you defaulted.

    The government has made changes to credit laws in order to assist consumers in financial difficulty, but you need to put your hand up and own your financial problems, and you need to have a plan.

    To begin with, stop lying to yourself about how much money you actually have. To get any help, or to help yourself, you first need to know exactly how much you have left at the end of the week – or even how much you are in the red.

    If you know you can’t make your credit repayments, work out how much you can pay from what you have, and give this information to your Creditors to negotiate a financial hardship plan which may see your repayments reduced for a period of time. For more information on financial hardship variations, visit ASIC’s MoneySmart website.

    If you are not in dire straits yet, don’t wait till you’re there to do something about it. Kochie recommends starting with a plan that involves either cutting back expenses or earning extra income to balance the books. Make a goal, make a plan and get yourself there.

    * I should buy a home because that’s what grown-ups do

    Despite the ethos that everyone in Australia has the right to own their own home, buying a home is not right for everyone. Kochie argues that for some, renting and investing your savings can be a better financial option.

    For others, they may see more results being able to buy a home and focus on paying down the mortgage (creating equity) as their investment strategy.

    And some people just won’t be able to meet the big financial commitment that a home loan entails, even if they want to, and even if on paper, they look like they could. If this is you, consider that for now, you may be better off learning more about how to make credit work for you, to gain more money skills and adopt a different attitude towards money and credit before you take the plunge.

    * If I dip into my savings now I can always make up for it later

    Kochie advises it’s way more productive to leave your savings untouched and earn extra to pay for the item or experience. If you are saving for a home or business loan, then more savings means cheaper credit.

    * If I get approved for a loan or credit limit increase, I can afford it

    Kochie says this is probably the most dangerous of all lies. “Forget what the bank is offering in terms of increased credit card limits or loan amounts, only you really know what you can afford,” he says.

    Remember, the bank doesn’t have to pay your loan back – you do.

     

    Some other lies you can tell yourself about credit which you shouldn’t:

    * No news is good news when it comes to bills.

    No its not! If you think you should have received a bill and haven’t, the best thing you can do is chase it up. Nine times out of ten your Creditor thinks you should have received it, and you accrue days in arrears, meaning they may default you anyway whether you received the bill or not. This is especially important if you change addresses.

    *If I love someone, money doesn’t matter.

    Money still matters and when it comes to credit accounts, love may be blind but your Creditors are not. You need to keep your head in money matters when love is good and when love goes bad. Sometimes joint credit accounts can land you in hot water. Cover yourself and your credit file against the worst.

    * Someone else will tell me if my credit file is not accurate.

    No they won’t, it’s up to you to be proactive. There is an avenue for complaint if you think your credit file is inaccurate, but the responsibility for finding out whether everything is correct rests which the individual credit file holder. So it is really important that you do an annual credit check (which is free) through Australia’s credit reporting agencies. Don’t leave it until you’re applying for a home loan to find out you have defaults or other credit listings you don’t think should be there.

    To find out more about credit file accuracy, visit our main site www.mycra.com.au or call a Credit Repair Advisor tollfree on 1300 667 218.

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  • Get organised for Christmas to save your money and your credit rating

    Christmas is coming!!! Less than two months to go – gulp. If you have started to think about buying gifts, but don’t have much cash to do that with – then now is the time to start saving or to think about taking out credit to cover the costs. We look at the best ways to stay smart about credit over the Christmas period – and show you how a budget could save you money and reduce your chances of succumbing to bad credit history by racking up Christmas credit card debt you can’t pay back.

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

    David and Libby Koch recently wrote a great article on saving money over Christmas ‘Budget for the festive financial cliff.’ They advise you to start saving now, and sidestep credit as much as possible to avoid the February blues after the credit card bill comes in.

    “The Christmas, New Year and summer holiday period can leave even the best-run family budget in tatters.

    It can be a huge drain on family finances and cause a lot of undue stress. But by starting to plan early you can make sure that it’s a relaxing and affordable time for everyone, even the organiser.

    We’re not talking about two weeks out, we mean two months out and that’s now,” they write.

    Planning is great advice, and that can include sitting down now and writing your shopping list, whilst you are calm and slightly removed from the Christmas madness which often sees us overspending on everyone.

    The Kochs’ advise setting a budget, “set realistic limits and ensure everything is accounted for.”

    Their top tips include:

    • Suggest a Secret Santa

    A great way to keep the cost of presents under control is through Secret Santa, where everyone draws a name out of a hat and only buys a present for that person. This works best for big extended families and with a pre-agreed limit for everyone to spend on their gift.

    Not only does it put a cap on costs, but also means everyone gets one good present instead of lots less useful gifts. That’s the plan anyway.

    • Write down what you want for Christmas

    Try writing down the things you want to buy for yourself over the next couple of months. Then, next time somebody asks, think back to that list and hopefully you’ll get something you would have spent money on anyway.

    They also suggest:

    • Buy in bulk and give extended family the same item.

    • Give a voucher for your time – to babysit, garden, etc.

    • Make a gift such as craft items or cookies.

    • Regift any of those unwanted presents.

    • Make a tax-deductible donation to charity.

    Want more tips? Earlier in the month savingsguide.com.au posted some tips for getting frugal over Christmas ‘A Frugal Christmas: 5 Things To Do Now’. Here are a couple of great ideas:

    • Tally up what you spent last year

    There’s no way to prepare for the event- a joyous one to be sure, but difficult to fit into already stretched budgets- without knowing exactly what you spent[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”][last year]. My figure always gives me a heart tremour when I see it. You might be resolved to spend less, but it’s crucial to know what you’ve been spending.

    • Budget Cuts

    Shave ten dollars off each present you have to buy, commit to not buying presents for yourself as the season really kicks off (I am deeply guilty of that one, every year) and look at organising three of four major events, as opposed to trying to attend twenty smaller ones. Rewrite your budget to take into account your ideal expenditure.

    Credit can be really handy at Christmas time – but just because you’re putting something on ‘the card’ doesn’t mean you can ignore a budget. At some stage you will pay that credit back. So it is really important to watch out for overspending with credit at Christmas. It’s easy to get caught up in the “Christmas spirit” – but don’t spend what you can’t afford.

    You may, as many do, feel the pressure to “give” so much you do so at the expense of your own budget and ultimately end up with a debt you can’t pay back. The end result of this can be getting into more debt to pay the original debt. It eventually catches up with you, and you end up with loan commitments you can’t meet or other bills get neglected because you just can’t afford to pay it all. Creditors start to default your credit file. Your financial freedom is compromised.

    This is why budgeting is so important.

    There is always something great you can buy that fits in your price range.  It just takes a bit of thinking. Besides – isn’t it the thought that counts? If you take the time to think cleverly now, you won’t be tempted to overspend in a mad panic later. And at the end of the day, your good credit rating won’t be suffering in the New Year, due to credit card debt.

    If you have a default on your credit file, or other bad credit history which you don’t believe should be there, then we may be able to help remove it and give you back your clean credit rating. Contact a MyCRA Credit Rating Repairs to have a no-obligation chat with a Credit Repair Advisor about your situation. If you want to know more about your credit rating, or credit repair – or visit our main site www.mycra.com.au.

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