MyCRA Specialist Credit Repair Lawyers

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  • Update on mandatory data breach notification laws

    mandatory data breach notificationThe long-awaited amendments to the Privacy Act 1988 making reporting of serious data breaches mandatory, has been passed in the House of Representatives and had its second reading in the Senate yesterday. We  cover what this Bill will mean if it is passed, and what it means for your credit file.

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

    If passed by both houses, the Privacy Amendment (Privacy Alerts) Bill 2013 will be implemented as part of amendments to the Privacy Act in March next year, alongside other amendments.

    The amendments will force businesses and government agencies covered by the Privacy Act 1988, to notify people when a serious data breach affecting their privacy occurs.

    The notification requirements do not apply to all data breaches, only breaches that give rise to a risk of serious harm. Serious harm could include physical and psychological harm, as well as injury to feelings, humiliation, harm to reputation and financial or economic harm.

    The Commissioner will be able to seek civil penalties if there is serious or repeated non-compliance with the notification requirements and the Information Commissioner will be able to direct agencies and business to notify individuals of data breaches.

    The legislation has been introduced following criticism of the current voluntary reporting system. It seems when faced with a choice, many entities think of the bottom line or other publicity concerns rather than the security of people’s personal or financial information.

    A bit about how data breaches can threaten your credit file

    Personal information in the wrong hands can lead not only to identity fraud, but the misuse of the victim’s credit file, which can have significant long term consequences.

    A lot of identity fraud is committed by piecing together enough personal information from different sources in order for criminals to take out credit in the victim’s name. Often victims don’t know about it right away – and that’s where their credit file can be compromised.

    Once the victim’s credit rating is damaged due to defaults from this ‘stolen’ credit, they are facing some difficult times repairing their credit rating in order to get their life back on track.

    These victims often can’t even get a mobile phone in their name. It need not be large-scale fraud to be a massive blow to their financial future – defaults for as little as $100 will stop someone from getting a home loan.

    Once an unpaid account goes to default stage, the account may be listed by the creditor as a default on a person’s credit file. Under current legislation, defaults remain on the credit file for a 5 year period.

    What is not widely known is how difficult credit repair following can be – even if the individual has been the victim of identity theft, there is no guarantee the defaults can be removed from their credit file. The onus is on them to prove their case and provide copious amounts of documentary evidence.

    Unfortunately data breaches are difficult for individuals to have any control over, and the only way people can ensure their details are safe are to demand that the companies they deal with have strong IT systems before disclosing that information.  People should adopt the philosophy of a need-to-know basis for disclosing their personal information. They should always question the need for it to be handed over. If it is not essential, they shouldn’t do it.

    Image: Stuart Miles/ www.FreeDigitalPhotos.net

  • Banks encouraged to lift their standards around guarantor education.

    Guaranteed loans – they’ve become more prevalent as house prices rise, and as access to business credit changes – but this type of loan can come with significant risk depending on how it’s set up. guaranteed loanIt often requires a savvy, credit-educated person to sign on the dotted line to take on a guaranteed loan. But this isn’t always the type of person asked to sign a guarantee. In response to some complaints by guarantors who claim they have not been given the appropriate advice, a survey was issued to banks to review their compliance with the Code of Banking Practice by its review body, the Code Compliance Monitoring Committee. We examine the findings of this survey, and put guaranteed loans into perspective with the possible implications to the guarantor’s credit file.

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

    Guaranteed loans can be complicated, and can leave some individuals vulnerable. The Code of Banking Practice has identified this, and has set out requirements for banks in dealing with the area of guaranteed loans (28.3-28.6 of the Code of Banking Practice) which include requiring banks to issue prospective guarantors a warning notice explaining their rights and obligations as a guarantor. Banks also can’t accept a guarantee until the guarantor has sought independent advice.

    But has this been enough to protect individuals who find themselves asked to guarantee a loan? The Code Compliance Monitoring Committee (CCMC) has found more can be done by banks to promote better compliance, and ultimately better understanding by individuals of the risks involved in guaranteeing a loan.

    The CCMC is an independent review body for banks’ compliance to the Code of Banking Practice. According to the CCMC report on guaranteed loans, the body undertook a survey of banks due to a number of allegations of breaches of the Code by banks:

    “During 2011-2012, the CCMC received a number of concerns and enquiries about alleged breaches of the Code by banks in this area,” the report states.

    The CCMC identified a need going forward to ensure compliance, and better compliance by banks to the Code concerning guaranteed loans. It considered the economic climate will likely continue to provide an environment where guaranteed loans will rise:

    “The high number of credit facilities currently supported by a Guarantee indicates that these play an important part in the provision of credit, both to individuals and to businesses. Issues can and do arise however when banks do not comply with their own procedures. While the number of cases where issues have arisen in respect of Guarantees is comparatively small, the impact on individuals in these circumstances can be considerable. The current economic environment also suggests that this may continue to be an important issue over the short to medium term. This is a view shared by the consumer advocates interviewed by the CCMC as part of this Inquiry.”

    The CCMC’s report demonstrates that overall banks were meeting the requirements of the Code by having good systems and procedures in place, and were monitoring those systems. But it also found that some banks could do more. It cited some good industry practices amongst some banks that could be applied across the board to ensure prospective guarantors were making informed decisions. The CCMC says it recognises that banks have an important role in ensuring relevant information if both provided and considered by prospective guarantors prior to the execution of the Guarantee:

    “The Code sets out the minimum standards banks have agreed to follow when dealing with personal and small business customers. Banks should, therefore, consider how they satisfy themselves that informed decision making is taking place, particularly where they identify that a prospective guarantor might be vulnerable, whether due to their relationship with the borrower or where they have limited capacity to understand the credit contact, such as where English is a second language. The CCMC also considers that the more complex the Guarantee and the loan documentation, the greater is the obligation on the bank to ensure the potential guarantor engages in informed decision making.

    The CCMC accepts, however, that there is a duty on the individual to consider carefully the information provided by banks before agreeing to become a guarantor,” it states.

    Disclosures of information and warnings were considered imperative to the guarantor making an informed decision about becoming a guarantor. The CCMC recommended banks ensure that information and notices are provided to the prospective guarantor in a timely manner to ensure they have sufficient time to consider their position and the risks associated with the Guarantee prior to execution.

    This will ensure that the prospective guarantor has sufficient time to consider the risks and financial liabilities of becoming a guarantor before entering into the agreement.

    Good industry practice suggests that even a prospective guarantor who has received independent advice, should be given at least 24 hours to consider the Guarantee documents prior to signing.

    This will increase the prospective guarantor’s opportunity to consider the risks and financial liabilities of becoming a guarantor in the context of the independent advice given, before entering into the agreement.

    They also brought up the need for banks to consider the vulnerability of a prospective guarantor:

    “Banks which have effective processes to identify classes of prospective guarantors and take additional steps to ensure they receive information about their rights and responsibilities and the financial position of the borrower, are better placed to comply with their Code obligations.”

    These vulnerable individuals may include elderly people, non-English speakers and people who offer a family home as collateral. The CCMC will follow up this Inquiry in the 2013/14 Annual Compliance Statement, to determine what changes, if any, banks have implemented to systems and procedures in response to the findings of the survey.

    Earlier in the year, we reported that some banks had begun to relax requirements around guaranteed loans to include a new term – Security Guarantee. This meant the guarantor would no longer have to be a parent, sibling or spouse of the borrower. But identified at the time, were some significant risks to this loan which arguably far outweigh the benefits.

    On a guaranteed loan the guarantor is liable for the debt if the borrower fails to make repayments. The guarantor’s credit rating is then linked with the credit rating of the borrower through the loan, despite having little control over the outcome of repayments.

    If the debtor defaults on their loan, under certain terms the Credit Provider can pursue the guarantor to recover the debt, which can include default listing the guarantor. Negative entries such as defaults on a person’s credit file will impact the ability to obtain credit for 5 years.

    In cases of significant arrears, the bank begins to use the property the guarantor put forward as collateral to recover the outstanding debts.

    It is timely that the CCMC should review banking procedures in this area. The upward trend in guaranteed loans may increase the exposure of vulnerable individuals to guaranteed loans in their many forms.

    It is imperative that all facilitators take on an educational role – despite it ultimately being the decision of the guarantor themselves. Further education at that level will help to identify more who are vulnerable, and protect those who may not be fully informed of their rights, their obligations and the risks to their finances and their credit file before entering a guaranteed loan.

    Image: Ambro/ www.FreeDigitalPhotos.net

  • Struggling to pay your mortgage or loan? Your bank says they want to help.

    financial hardshipIt may be a foreign concept to some people to turn to their bank when they are experiencing financial difficulty, but asking for help from your bank could be the most savvy thing you can do for your finances, and ultimately your credit file if you are in trouble. New financial hardship laws which came into effect in March 2013 have been embraced by banks, and the Australian Bankers’ Association (ABA) has today announced a package which is designed to help make the process clearer for consumers who are experiencing temporary financial difficulty. We look at the package in detail, what it means for your credit file and your ability to obtain credit when you recover financially.

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

    As a Cancer survivor, I know all too well what it’s like to be in a worrisome financial situation. When you have to take time out from your business or employment to recover your health, the bills can pile up. I remember trying to talk to my bank at the time about freezing my mortgage so I had one less worry. But that was a difficult thing to do – especially for someone whose small business used credit accounts. In my experience, my bank wasn’t eager to offer the hardship, and when they did, it was under terms too difficult for me to accept. So I borrowed my way out of trouble, and luckily – I recovered quickly and was able to get back on my feet again. But many people in the past have not been so lucky. They have run into real trouble, and banks may have been criticised for not being open with the existence of their hardship policies, or willing to vary credit terms unless the customer could jump through the right hoops to secure it.

    But with new legislation Consumer Credit Legislation Amendment (Enhancements) Bill 2012 being passed this year, there have come new rights for those in temporary financial trouble. Now the banks are taking a proactive stance on encouraging open communication and variations to the original credit contract of those consumers ‘doing it tough.’

    The ABA and banks in consultation with consumer and community groups have developed a package of initiatives that are proposing to promote good practice, clearer hardship processes and provide useful information to support their customers in dire financial circumstances.

    This is reportedly in response to concerns raised by stakeholders around a general lack of awareness about hardship assistance offered by banks.

    Steven Münchenberg, Chief Executive of the ABA, says research shows only one out of four bank customers know that banks offer hardship assistance.

    “If customers find themselves in financial difficulty, they need to take some action because money troubles don’t usually go away on their own. Don’t ignore the problem and talk to your bank as early as you can. Customers can also call an independent financial counsellor or ask your bank for a referral to an independent financial counsellor,” he said in a media statement.

    The ABA estimates that over 135,000 customers have been provided with hardship assistance by the main retail banks over the past year.

    Banks have reported that the number of customers who take advantage of financial hardship arrangements increases when economic conditions deteriorate. The key driver of hardship assistance is reduced income due to unemployment.

    Banks have also reported that customers have benefited from temporary assistance following a natural disaster. However, assistance during these times does not have a significant impact on the overall number of customers who are provided with hardship assistance.

    Mr Münchenberg also says illness, injury or a relationship breakdown can cause financial difficulties.

    The ABA’s consumer factsheet on hardship variations (pdf) explains what some of the hardship assistance options could be:

    Hardship arrangements cover the time between when your circumstances change and when you can start repaying your debts in full or varied as agreed.

    In most cases, people just need some temporary help to get them through the tough times and arrangements of between three and six months are generally suitable.

    The arrangements available will depend on your personal circumstances and financial situation. Somemeasures may include:

    • deferring or reducing loan repayments

    • restructuring and consolidating loans

    • altering loan repayments to interest-only

    • changing limits on lines of credit

    • waiving penalties for early withdrawal of a term deposit

    • freezing loans in exceptional circumstances, such as after an emergency event or natural disaster

    • providing a moratorium on collections action • providing alternative banking arrangements.

    When considering the type of assistance that might be appropriate, banks will assess the situation on a case-by-case basis and consider your specific circumstances, such as your overall financial position and whether assistance would genuinely be able to help you.

    Banks also have to factor in business considerations, such as whether providing the assistance is consistent with their internal policies, commercial costs and management practices.

    If your financial situation has permanently deteriorated and you can’t meet regular repayments over the long term even with your bank’s help, you might need to consider other options and make some difficult decisions.

    While people rarely have to face this situation, if it occurs you may have to sell your property, refinance your business or consider bankruptcy or insolvency arrangements.

    How will asking for a hardship variation impact my credit file?

    We see the emphasis on hardship variations as a positive change for consumers to be able to talk to their bank and actively get help to improve their circumstances. One of the main differences between asking for and obtaining an official variation in your credit obligations compared with simply not paying your bills is that you avoid the bank placing a default listing on your credit file (provided you meet the new obligations that is). There is a big incentive to come to try to come to an arrangement with your bank prior to being in default (60 days in arrears) – as any arrangements made after that time will be recorded on your credit file as well as your default.

    Secondly, there is also an incentive to put your hand up and ask for help in the early days – prior to being even one payment cycle behind in your repayments. Any time you fail to make a repayment with your bank on time, the late payment will be recorded on your credit file – so for example if you are unable to make this month’s mortgage repayment by the due date, that will be recorded on your credit file, along with the date you made the payment. Although lenders won’t see this data until March 2014, it is being recorded now.

    Any person who makes an official hardship variation which is accepted by their bank will be spared from being recorded as in default, but may not be spared from the late payment notations which are incurred prior to the acceptance of the hardship variation. So the incentive really is there to get in as early as possible if you are experiencing temporary financial difficulty and speak with your bank to make new arrangements to suit you.

    Where do I go from here?

    You can get assistance through the ABA’s Doing It Tough website, or you can contact your bank or building society directly and ask to speak with the Financial Hardship Variation Team. Using the words ‘financial hardship’ will help make it clear to the people you speak with at the bank about what it is you need. Ideally, act before you fall into arrears on your account – to save your credit file when you recover from this difficult time.

    For additional advice, visit ASIC’s Money Smart Website Trouble with Debts.

    To check what is being seen by lenders about you, it is a good idea to get a copy of your credit file. This is free once every 12 months from Australia’s credit reporting agencies, and will be sent within 10 working days. If there is anything on your credit report which you are unsure about, or which seems inaccurate or inconsistent, you do have the right to have the information rectified. Contact MyCRA Credit Rating Repair for more information on disputing a credit listing or to obtain a free copy of your credit report 1300 667 218.

    Image: imagerymajestic/ www.FreeDigitalPhotos.net

  • Mandatory data breach notification Bill before Parliament

    data securityThe Attorney-General has put before Parliament a mandatory data breach notification bill, which will require businesses and government agencies to notify people when a data breach affecting their privacy occurs. In our view this long overdue legislation is imperative to protect individuals who have their personal information unsecured in some way.  This will allow those individuals affected to take swift steps to secure their own records and personal information from identity crime. We look at why these laws are so important and how a data breach can impact a person’s credit file.

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

    Remember when Sony was hacked? Thousands of Sony Australia customers were kept in the dark about it for some time – and there wasn’t a thing our Privacy Commissioner could do after the fact, due to there being no legal requirement in Australia on businesses or other entities to notify individuals when a data breach in their business could impact their personal information.

    Events like that – along with a long list of other breaches – have inspired changes within our legislation.

    The Attorney-General Mark Dreyfus QC handed over The Privacy Amendment (Privacy Alerts) Bill 2013, for its first reading in parliament yesterday. If passed, amendments will be implemented along with other major amendments to the Privacy Act 1988, on March 12, 2014.

    The new laws will require notification of data breaches to the Office of the Australian Information Commissioner, on all entities covered by the Privacy Act 1988, including many businesses.

    The notification requirements do not apply to all data breaches, only breaches that give rise to a risk of serious harm. The Commissioner will be able to seek civil penalties if there is serious or repeated non-compliance with the notification requirements.

    “To make sure that the new laws have teeth, the Information Commissioner will be able to direct agencies and business to notify individuals of data breaches,” Mr Dreyfus said in a statement to the media on Tuesday.

    In a Computerworld article ‘Proposed mandatory data breach notification bill read in Parliament’, Privacy Commissioner, Timothy Pilgrim, reportedly said he has supported the introduction of mandatory data breach notification laws in Australia since they were first proposed by the Australian Law Reform Commission in 2008.

    “The last couple of years have seen a number of high-profile data breaches and subsequent own motion investigations initiated by me, and research suggests that the frequency of data breaches in Australia has continued to grow over the past three years,” he said.

    Despite this upward trend, the Office of the Australian Information Commissioner (OAIC) received 46 data breach notifications in the 2011–12 financial year, an 18 per cent decrease from the previous year.

    “I am concerned that we are only being notified of a small percentage of serious data breaches that are occurring,” Pilgrim said. “Many critical incidents may be going unreported and consumers may be unaware when their personal information could be compromised.”

    Up to now, whilst organisations are encouraged to disclose data breaches to the Commonwealth Privacy Commissioner, it has not been mandatory to do so. There has been much criticism over companies “holding out” on their customers following a data breach, and waiting days or up to a week or so to notify customers that their personal information may be at risk.

    During this time, it has been argued that hackers have had free access to this personal information without the customer doing anything to minimise their own risk, such as cancelling accounts, changing passwords and flagging their credit accounts and credit file.

    We agree this is an area which is overdue for legislation, especially going in hand with other new Privacy Amendments already passed.

    We can’t take lightly the possibility that any company that keeps data on its customers could be exposed to data breaches. Identity theft is becoming more prevalent, and personal information is lucrative for fraudsters.

    Unfortunately it seems everywhere people turn some company has been hacked – and it seems every entity with a computer is vulnerable. It is still extremely scary the level of risk peoples’ personal information undergoes these days when it is stored online.

    Personal information in the wrong hands can lead not only to identity fraud, but the misuse of the victim’s credit file, which can have significant long term consequences.

    A lot of identity fraud is committed by piecing together enough personal information from different sources in order for criminals to take out credit in the victim’s name. Often victims don’t know about it right away – and that’s where their credit file can be compromised.

    Once the victim’s credit rating is damaged due to defaults from this ‘stolen’ credit, they are facing some difficult times repairing their credit rating in order to get their life back on track.

    These victims often can’t even get a mobile phone in their name. It need not be large-scale fraud to be a massive blow to their financial future – defaults for as little as $100 will stop someone from getting a home loan.

    Once an unpaid account goes to default stage, the account may be listed by the creditor as a default on a person’s credit file. Under current legislation, defaults remain on the credit file for a 5 year period.

    What is not widely known is how difficult credit repair following can be – even if the individual has been the victim of identity theft, there is no guarantee the defaults can be removed from their credit file. The onus is on them to prove their case and provide copious amounts of documentary evidence.

    Unfortunately data breaches are difficult for individuals to have any control over, and the only way people can ensure their details are safe are to demand that the companies they deal with have strong IT systems before disclosing that information.  People should adopt the philosophy of a need-to-know basis for disclosing their personal information. They should always question the need for it to be handed over. If it is not essential, they shouldn’t do it.

    The fact that our country is attempting to legislate this important area is a big step in the right direction. Forcing companies to act quickly would minimise the harm which could occur to the victims’ financial identity and credit file information. Whilst it won’t prevent all data breaches, it will encourage better security. A requirement to disclose potentially harmful breaches would mean a company’s bad security is thrown right into the limelight. And not even the big wigs would want that.

    Image: David Castillo Dominici/ www.FreeDigitalPhotos.net

  • Credit ‘blemishes’ contribute to first home buyer slump

    Press Release

    bad creditCredit ‘blemishes’ contribute to first home buyer slump

    16 May 2013

    First home buyers eager to buy property are plagued by credit blemishes, according to a national credit repairer, who argues bad credit has as much of an impact on first home buyer numbers as lack of market confidence.

    CEO of MyCRA Credit Rating Repair, Graham Doessel says latest figures from the Australian Bureau of Statistics (ABS) showing first home buyer numbers remain low despite other parts of the market moving up are a testament to the challenges faced in obtaining credit under tight lending conditions.

    “First home buyers can have difficulty obtaining credit in this market as they are probably the least educated on the ways their credit rating can be diminished and most active with credit habits which can reduce their credit rating,” Mr Doessel says.

    Official Housing Finance figures released by the ABS on Monday show in original terms, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments fell to 14.2% in March 2013 from 14.4% in February 2013 – despite falling interest rates.[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 there are some credit habits which can reduce any credit rating.

    “Excess credit enquiries, multiple personal loans and negative credit listings can be detrimental and first home buyers may not realise the impact these decisions will have on their home loan application in the current market until it’s too late,” he says.

    He says some are also finding default listings on their credit file they had no knowledge of.

    “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 Credit Provider has made a mistake and put a default or other listing on the consumer’s credit file when it shouldn’t be there,” he explains.

    The credit habits of Australia’s young people, who may make up the majority of what should be ‘first home buyers’ was recently revealed in a report from credit reporting agency Veda Advantage.

    The report showed the number of credit defaults amongst Gen Y had grown 5.3% over the past three years to 60% of the share of all credit defaults.[ii]

    “We are seeing more of Gen Y lumbered with 5 years of credit defaults – unable to even get a mobile phone plan let alone a home loan,” Mr Doessel says.

    He says there are 5 things first home buyers should be aware of before they apply for a home loan:

    1. Only apply for credit you have full intention of pursuing. Currently there is no way of seeing if the loan you applied for was approved or not, only that the application was made. Some lenders are refusing home loan applications due to too many credit enquiries, such as two enquiries within thirty days or six within the year.

    2. Reduce personal loans or ‘high interest’ loans before applying. Even if you are meeting all of your repayments well, too many high interest loans, credit cards or personal loans may reduce your credit rating.

    3. Reduce credit limits. If you have a credit limit of say $20,000 on your credit card, the debt amount on that card will be calculated on $20,000 – even if the actual amount you have owing on that card is only $5,000. So if you are going to take out cards or lines of credit, seek to set a credit limit nearer to what you need.

    4. Order a copy of your credit report. Anyone has the right to request a copy of their credit file, to see what is being said about them. If you are not in a hurry, it can be requested at no charge from Australia’s credit reporting agencies, and mailed to you within 10 working days.

    5. Clear up mistakes. There is the potential for creditors to make mistakes when entering listings on credit files. These mistakes range from out and out unfair listings right through to incorrect notices provided, wrong addresses and simple human or computer error. It’s a good idea to sort out any disputes well before you apply for a home loan.

    “Currently, listings are not removed unless you can provide adequate reason and evidence as to why the listing has been placed unlawfully on your credit file, so it is important to be well educated on credit law when dealing with issues around your credit file, or to employ someone who is,” Mr Doessel says.

    /ENDS.

    Please contact:

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

    Graham Doessel -CEO Ph 3124 7133

    http://www.mycra.com.au/ 246 Stafford Road, STAFFORD QLD. Ph: 07 3124 7133

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

     

    ——————————————————————————–

    [i] http://www.abs.gov.au/ausstats/abs@.nsf/mf/5609.0

    [ii] http://www.veda.com.au/news-and-media/article.dot?id=542009

    Image: Stuart Miles/ www.FreeDigitalPhotos.net[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

  • 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.

    Image: Teerapun/ www.FreeDigitalPhotos.net

  • Vodafone customers – ‘desperate and defaulted.’

    20070920 Image Close up of credit card bill iStock_000003981197Large GDOE 01Media Release

    Vodafone customers – ‘desperate and defaulted.’

    5 March 2013

    A Queensland family should have been relaxing in their newly purchased home after an interstate transfer, but instead they have been fighting Vodafone over a default which saw them lose their house contract – a default which they say, was ludicrous.

    Up till now, Alastair and Nikki Taylor have not been able to join the 20,000-plus Vodafone customers who are mounting a class action against the telco, because doing so could have damaged their dispute case against their Vodafone default listing.

    The default listing which has been proven to be unlawful and finally been removed by Vodafone today, saw them cop what they say, is an unfair and incorrect 5-year default on their credit file.

    “This default was stopping us from getting a home, and it is grossly unfair the time and money we have lost, not to mention the stress it has caused our family,” Alastair says.

    Alastair and Nikki purchased a wireless internet modem from a Vodafone store in Western Australia, but claim they were misled about the internet coverage it would provide.

    “At the time we verified with the sales assistant many times if it would work in the address we intended to move to as we had recently bought a new house. She assured us we would have full coverage. Upon arriving at our new address we found we were absolutely without coverage,” Alastair says.

    He says he contacted the store at least ten times, leaving messages and getting no response.

    “When I did finally get to talk to someone they rudely hung up on me. The next time I spoke to somebody, was when a debt collector called chasing the outstanding money around two months later. I told them the situation but they wouldn’t listen and were only interested in getting the money out of me,” he says.

    The couple begrudgingly paid the account late last year, when Alastair got an interstate transfer. They were told the outstanding account was affecting their credit rating and stalling their purchase of a home in Cairns.

    “We had no idea we were defaulted anyway whether we had paid the account or not. We lost the house we were after, and have had a lengthy battle with Vodafone to remove it,” Alastair says.

    Their advocate, MyCRA Credit Rating Repair’s Graham Doessel says they are certainly not alone in their experience.

    “Many telcos have historically poor levels of customer service and many times customers don’t get what they think they are paying for. What’s worse is when those botched plans end up costing the customer their credit file,” Mr Doessel says.

    The Telecommunications Industry Ombudsman’s annual report, released in October last year shows a rise in complaints about credit default listings. Complaints about consumers being credit default listed while their debt was in dispute increased 18 per cent from 3,700 to 4,370.

    “I am very concerned about the increase in the number of complaints where credit default listings are disputed,” Mr Cohen said “Credit listings can have very significant impacts on people – affecting applications for credit, including for housing and personal loans. Any credit default listing should only occur after the correct procedures have been followed.”

    Mr Doessel says preventing and disputing a credit file default from a telco often comes down to awareness of legalities.

    “Many people don’t know the rules well enough when dealing with these big companies, so it can be a little like David and Goliath and many times the big guy wins,” he says.

    He says his clients encounter difficulties with telcos at many levels.

    “In our experience it’s not just the initial sale of product which is in dispute, but the entire customer service process and often the process of default listing the client as well,” he says.

    He is hoping the very public class action will be a force of change, especially following the introduction of tougher laws for telcos in September last year.

    The ‘Telecommunications Consumer Protection Code’ was pushed through with the guidance of the Australian Communications and Media Authority (ACMA) which have amongst other things aimed to facilitate faster, better complaints-handling, with urgent complaints resolved within two days.

    ACMA Chairman Chris Chapman said at the time the ACMA would put the industry on notice, advising they would take a “far more robust approach” to ensure the industry’s compliance with the new Code.

    You can find more information on disputing a default with your telco at the MyCRA website www.mycra.com.au.

    /ENDS.

    Please contact: Graham Doessel – Founder and CEO 3124 7133

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

    http://www.mycra.com.au/ www.mycra.com.au/blog 246 Stafford Rd, STAFFORD Qld

    MyCRA Credit Rating Repairs 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.

  • Small business finance regulation deferred

    small business financeIt seems the controversial draft legislation regulating small business finance has been deferred – with the Government now saying it wants to take the time to get reforms right. This follows a barrage of criticisms from business groups that the new laws would make it much harder for small businesses to get funding.

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

    The Government’s Christmas ‘surprise’ for small businesses in the form of draft legislation to regulate commercial lending certainly met some criticism in the lending and small business sector.

    The legislation proposed prohibiting people from “engaging in credit activities” in relation to a small business credit contract or a small business consumer lease unless they hold a permit.

    Business publication SmartCompany confirmed last week in the story ‘Government backflips on plans to regulate access to credit for small business‘ that Treasury will put off any action on small business finance.  T

    hey said Financial Services Minister Bill Shorten announced the withdrawal of the draft legislation at a meeting with the Council of Small Business of Australia and the Commercial Asset Finance Brokers Association of Australia last week.

    It was also reported in Australian Broker today in the story ‘Commercial lending off the table…for now’ that Treasury indicated that its consultations had found “a need to further examine a number of key issues” relating to business credit.

    “Treasury’s release said that the Government considers that it is important to get the reforms right, given the important role that small businesses play in the Australian economy,” Gadens Lawyers partner Jon Denovan told AB.

    The CAFBA said in a statement that the government’s move to dump the draft legislation was a common sense result.

     “CAFBA maintained staunch resistance to all aspects of the draft regulation and was unwilling to accept or compromise its position, as CAFBA fully understood the debilitating impact of the proposed regulation and the flow-on effects to every small business in Australia,” it was reported in SmartCompany.

    This was our position on the draft legislation when it was released just days before Christmas:

    CEO of MyCRA Credit Rating Repair, Graham Doessel says the proposed changes would be widely criticised by small business advocates as stifling the flow of business credit in Australia and that the changes are unnecessary form of “hand holding” for Australian business owners.

    “Australian small businesses are already doing it tough getting credit out there post GFC – this is going to mean they will struggle even further to expand and there will be less start-ups,” Mr Doessel says.

    Where we did want to see change, was in the basic rights afford to commercial credit file holders before recovery is commenced.

    In the consumer landscape, if an account is overdue, then the account holder is afforded a 30 day right to remedy under the Credit Reporting Code of Conduct. This is meant to ensure that fair and reasonable means have been taken to attempt to recover the outstanding amount before further action is taken, and before the consumer’s credit file is defaulted.

    As commercial credit is not covered under the Code, this right is currently not provided to commercial credit file holders.

    The common courtesies which consumers are afforded and which many assume stay with them in the commercial sphere just don’t apply – many don’t realise just how big a risk commercial credit is.

    Here’s more from our media statement:

    “It’s like the ‘wild, wild west’ out there with some lenders defaulting small businesses with little to no warning.”

    Once a default is placed on a commercial credit file, then the length of time it remains on the credit file is legislated by the Privacy Act 1988.

    “A commercial credit file holder is still subject to 5 years of bad credit if they end up with a default listing, the ramifications are still the same – they are generally refused mainstream credit, refused mobile phone plans, car finance and credit cards – but the rules for how the default gets there in the first place are just not there,” Mr Doessel says.

    “In theory, you can be one or two days late in paying a commercial account and you can have your ability to obtain credit ruined. There is no right of redress, as there is no legislation governing notification requirements in the commercial credit sphere.”

    Mr Doessel says the Government has completely missed the mark on what small businesses need to thrive and survive.

    “Most don’t need restrictions on available credit, they just need the basic credit reporting rights that they deserve,” he says.

    We’re glad the Government has put this legislation on the backburner, but still hope at some stage commercial credit reporting will be reassessed.

    Image: franky242/ www.FreeDigitalPhotos.net

     

  • Financial freedom: are you self-sabotaging?

    self-sabotaging financial freedomIn today’s ‘Make Credit Work For You’ post, we look at advice from the Editor of Smart Investor magazine, Nicole Pedersen-McKinnon. Her article “Financial freedom: are you self-sabotaging?” was featured in Sunday’s Sydney Morning Herald. Nicole gives you some excellent advice for how to make the best of your money, and make sure you are not making basic mistakes that could see you taking longer to reach your ultimate financial goal of being debt-free.

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

    Financial freedom: are you self-sabotaging?

    IT’S likely the people around you know whether you’ll ever ”make it”; that is, make and keep enough money to secure the life you crave. They’ll know this simply by observing your behaviour. And they’ll know it quickly.

    If you’re game, ask their opinion to see if they squirm.

    The wrong attitude to your cash – leading you to do the wrong things with it – indicates a ticking financial time bomb. Here are the mistakes that will lead to an explosion:

    ■ Missing the (second) once-in-a-lifetime opportunity to repay your mortgage fast and save a fortune. Official interest rates have returned to the record lows set during the credit crack-up, and home-loan rates have plunged about 4 percentage points. Say they hypothetically stayed here and you hadn’t ever reduced your repayments, the extra $700 or so you would be contributing to a $300,000 mortgage would save you $118,000 and almost 11 years.

    ■ Keeping lazy savings. There is no excuse for holding money in low-interest savings accounts. You should be getting about 5 per cent (taxed) or, better still if you have a mortgage, an effective return of about 5.5 per cent (tax-free) by sticking it in there.

    ■ Not grabbing gifts such as government allowances, benefits and super giveaways. The big ones you need to apply for include first-home buyer concessions, family tax benefits, baby bonuses or paid parental leave, childcare assistance and the super co-contribution.

    ■ Falling into the yawning traps set by finance companies. The largest are making new spending on 0 per cent balance-transfer credit cards – this will be charged at an eye-watering interest rate. If you are ahead on mortgage repayments, then taking up a thoughtful offer to reduce your repayments is designed to recoup the lender’s lost interest. Also, if you breach the conditions to get the headline rate on savings accounts, you will lose out. You must hit the monthly requirements or the institution wins.

    ■ Staying out of the sharemarket, perhaps in favour of cash or bonds. Yes, the credit crack-up was confronting but you need growth assets such as shares and property to reach your goals. The key is to balance these with more stable, income-producing assets. The fortunes of markets can turn on the head of a pin – witness the 20 per cent share recovery in the past year – and you need to be invested to benefit. Remember this applies to your super, too.

    ■ Over-leveraging. Heed the main lesson of the global meltdown and use investment debt sensibly: limit it to an appropriate amount and have the means to cover it if a market turns hostile.

    And the big one:

    ■ Year after year using credit to spend more than you earn. This short-sighted behaviour has the greatest potential to sabotage your future. To be a financial success you don’t need to be particularly clued up, but you can’t be clueless, either.

    The last point might seem simple, but it can be tempting to bury your head in the sand about what your incoming finances actually are, and live your daily life on credit, spending more than you earn.

    This thinking isn’t limited to those with a low income. In fact, Australian Bureau of Statistics reported late last year that spending more than you earn can occur across every level of income.

    “One in seven Australian households is spending more than it earns, as the working poor struggle with monster mortgages and surging power bills.

    Nearly 8 per cent of the nation’s richest households were living on credit, the Australian Bureau of Statistics reported yesterday.

    Of the top 20 per cent of households earning the most money, 3 per cent could not afford to pay a gas, electricity or phone bill on time during 2009-10.

    Of the poorest 20 per cent of households, one in five could not pay their bills on time and one in four spent more than they earned,” it was reported in news.com.au in the story News.com.au ‘Aussie strugglers living beyond means’.

    And the end result can be the same. People can bomb out with their finances at every level. And Creditors don’t care what your income is when you’ve defaulted on your credit, only when and how you intend to pay.

    If you have over-extended yourself – even if it hasn’t yet made it to default stage – act now to reduce that debt. Make a plan – find a good financial counsellor (call ASIC’ financial counselling hotline on 1800 007 007 for a reputable one) – and make some tough decisions about your life. By all means necessary, avoid that default or any other impairment to your credit file.

    What Ms Pederson-McKinnon didn’t mention, is another way you could be sabotaging your own financial freedom – by living with defaults on your credit file that shouldn’t be there. A default on your credit file will give you 5 years of blacklisting from mainstream credit, meaning if you need credit during that time you will be paying thousands more (on an average home loan tens of thousands more) in interest over the term of the loan.

    By having your credit file reviewed by a credit repairer to check your suitability, you may find you are one of those lucky ones that is able to have their credit default removed. This process happens legitimately and legally by people who are experts at auditing your Creditor for compliance issues which can deem your credit listing unlawful and therefore removed from your credit file.

    Contact a Credit Repair Advisor if you need more information on credit repair 1300 667 218.

    Good luck with your own path to financial freedom.

    Image: digitalart/ www.FreeDigitalPhotos.net

     

     

  • Australia Day: Migrants to the ‘lucky country’ walk a rocky road to financial success.

    Australia DayMedia Release

    Australia Day: Migrants to the ‘lucky country’ walk a rocky road to financial success.

    21 January 2013

    Australia Day is the time when thousands of new Australians are welcomed, but an advocate for accurate credit reporting says some migrants are running into trouble with Australia’s credit reporting system, and are getting banned from credit and set back on the road to financial success.

    CEO of MyCRA Credit Rating Repair, Graham Doessel says migrants have unique issues with Australia’s credit system, and often the origins for unfair defaults and other credit notations come from mistakes during identity establishment.

    “Some of our migrant clients are finding issues coming from incorrect names placed on their credit files – resulting in the wrong person ending up with the default or other credit listing.”

    “It may be easy to track down and correctly list ‘John Smith’ but some nationalities have three or four names which can be presented in a different order in their country of origin. Even our migrants themselves can be unsure how to present that name correctly for identity establishment in this country,” Mr Doessel says.

    He says apart from identity establishment and identification issues, there is also a lack of education for migrants on the types of credit available, and what type is safest and easiest to manage.

    “Migrants may choose lenders with high interest rates and terms that are not user-friendly, ultimately setting them on a path of overdue payments and debt,” he says.

    Mr Doessel suggests that new Australians make a point of ensuring continuity with their name on any credit they take out and requesting changes to any bills or documentation which are incorrect.

    He also says many do not know they should be checking their credit file regularly to make sure it is accurate and free from unfair or incorrect listings.

    “It’s actually not just new Aussies who are kept in the dark. Many Australian-born Aussies are unaware they are responsible for checking their credit file, and that they can obtain a credit report every 12 months at no charge,” Mr Doessel says.

    7 Credit Tips for New Australians

    1. Do use credit – Having no credit history means there is nothing to calculate and the risk appears high to lenders. Start by borrowing something small and make repayments consistently.

    2. Make repayments on time – Repay any bills by the due date to avoid incurring a late payment notation on your credit file. If a bill is greater than 60 days late you will be listed with a default. Both notations may hinder your ability to obtain credit. If you are having trouble paying a bill by the due date, contact the creditor as they may be able to work out a payment plan as preference to listing your overdue account on your credit rating.

    3. A stable address – Lenders like to see stability and this can be reflected in your address. Once you have credit, make sure you update your address whenever you move. Defaults can happen when bills are sent to the wrong address.

    4. Do your research – A competitive interest rate can save you thousands – so double check you are getting the best deal for you and your circumstances before committing.

    5. Apply for credit with care – Only apply for credit you have a very good chance of being approved for. Likewise, only apply for credit you have full intention of pursuing. Every application is noted on your credit file as an enquiry, it does not stipulate whether credit was approved or not.

    6. Check your credit file regularly – Check your credit file before you apply for credit. Make sure all your details are accurate.

    7. Don’t leave defaults too late – If your credit file does show defaults and you feel they are incorrect, unjust or just shouldn’t be there – don’t put up with them for 5 years – it is possible to dispute a credit listing you believe is inaccurate.

    “We should use Australia Day to help our fellow Aussies, and raise awareness of the problems our new migrants face, so we can all experience financial success,” he says.

    People can contact MyCRA Credit Rating Repair on 1300 667 218 for help to obtain a copy of their credit report.

    /ENDS.

    Please contact:

    Graham Doessel – Director Ph 3124 7133

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

    http://www.mycra.com.au/ 246 Stafford Road, STAFFORD QLD. Ph: 07 3124 7133

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

  • How to cure Christmas credit hangover

    cure Christmas credit hangoverIn our ‘Make Credit Work For You’ post this week, we look at what you should do to recoup those financial losses over the Christmas period which are seeing you struggling with debt and that may have already impacted your credit rating this January. The below story by Karina Barrymore was featured in The Daily Telegraph and other publications this Sunday, and features comment from debt and finance experts including myself, Dun & Bradstreet CEO Gareth Jones, and Financial Counselling Australia’s Brian Harvey. I hope you find some helpful tips to assist you in getting your head above water with credit.

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

    How to cure Christmas credit hangover

    By Karina Barrymore Jan 13 The Daily Telegraph

    There are not quick fixes for a festive debt blowout.

    OK, DESPITE the good intentions, the spending urge somehow got the better of you and you’ve blown the Christmas budget. Christmas credit card bills and bank statements are about to arrive, so how do you cure a seasonal debt hangover?

    Unfortunately, there’s no gain without pain when it comes to getting back in the black. Here are the top tips from debt and finance experts for easing that pain in the purse.

    The debt collector Credit reporting agency and debt collector Dun & Bradstreet says the worst thing anyone suffering a new year debt hangover can do is ignore the problem.

    “We often see a spike in defaults in the first half of the year, which results from credit used over the Christmas period,” Dun & Bradstreet chief executive Gareth Jones says.

    “Apart from causing financial pain, this situation can also impact people’s ability to access future credit as the default stays on a credit report for up to five years.”

    His top tips are:

    Close any bank accounts or credit facilities that are not essential.

    Don’t ignore letters or phone calls about debts. If you owe money, the best thing you can do is repay it.

    Pay attention to all your bills and pay them in full and on time.

    Avoid borrowing money to get out of one debt, and don’t use one credit facility to pay off another.

    The credit file manager Credit file advocate and repair service MyCRA says at this time of year fraud and identity theft is also higher.

    “The increase in credit usage in general can also mean issues like identity theft, financial hardship and basic credit reporting mistakes can be more prevalent at this time,” MyCRA chief executive Graham Doessel says.

    “An important part of curing a post-Christmas credit hangover is to take stock of what is said about you on your credit report. There is the potential for errors to be present on your credit report. Mistakes can and do happen but the responsibility for checking your credit file rests with you.

    “Most people don’t realise how easy it is to obtain a default. If any credit account has been left unpaid for greater than 60 days, the creditor can list the overdue account as a default on your file.

    “Often we see people in the new year who have missed paying a phone bill during the Christmas rush, then gone on holiday for some time, apply for a loan in the new year and are shocked to find they have a bad credit rating.”

    Doessel says now is the time to check your credit file.

    You can receive a free copy from most credit reporting agencies within 10 days or you can pay a fee to receive it sooner.

    If you have negative listings, defaults, writs or judgments, which you believe are errors or unfair, you have the right to have these entries rectified.

    Advisers and counsellors Financial advisers and counsellors say the first and best thing to do if you are in financial strife is to seek support.

    “Act quickly and ask for help,” says Financial Counselling Australia member Brian Harvey. “Speak to a financial counsellor, family, partner, your bank.

    “If people are left with post-Christmas debt, they should contact their providers as soon as possible to let them know they are having difficulties. They can then set up an affordable repayment arrangement, which will involve them first working out what is affordable. Often people put off dealing with the debt as long as possible, during which time it often grows.”

    Hewison Wealth adviser Glenn Fairbairn says sometimes refinancing your credit card by seeking a lower-cost loan can ease the repayment burden, or allow you to get ahead because you’re paying less interest.

    “It is important to prioritise the repayment of any outstanding credit card debt, even if this means cutting back on discretionary spending. Cut up your credit card. This will ensure that you don’t do the same thing again next year.

    “And start planning for next Christmas now.”

    The legal centre “Get on the front foot and seek assistance,” Consumer Action Law Centre spokesman Daniel Simpson says.

    “If you put off getting help, you’re only going to fall further behind.”

    “The first thing you should do is pick up the phone, call the credit provider.

    “Think twice before hiring a credit repair or budgeting service to help you. These companies make it sound easy and pain-free to repay your debts but they usually charge a significant fee.”

    If you’re in credit strife

    * Don’t ignore the problem. Be proactive and ask for help.

    * Act quickly and let your creditors know you are having trouble. Ask for a new repayment plan if you need to.

    * Start to repay a little, even $10, over and above the minimum repayments.

    * Set a strict budget, including all your repayments and bills before other spending.

    * Cut up all your credit cards.

    * See a free financial counsellor, phone 1800 007 007 for an appointment.

    * Be aware that budgeting companies and credit repair agencies charge a fee.

    The message to not bury your head in the sand, and to get on top of your debts early, can’t be stressed enough to avoid getting into hot water with defaults on your credit rating.

    However, it is important to know that credit repair and budgeting services are different entitites, and do different things for you. Credit repair is generally not a budgeting service.

    What is credit repair?

    A decent credit repairer addresses credit rating inconsistencies by auditing your credit file and customer information to find areas of non-compliance by your creditor which may see your default or other negative credit listing removed from your credit file. It is useful for those people who believe their listing is unfair, contains errors or is unfounded (or those people who want to check the lawfulness of their credit listing).

    You may dispute inconsistencies on your credit file yourself, and this is free. But many people choose to use a professional credit repairer to work on their behalf because they don’t have the time, and most importantly because they find the process incredibly difficult. To ensure successful removing of a credit listing from your credit file, you must prove that your creditor did not comply with the law when placing the default or other listing on your credit file.

    So its more involved than just showing right and wrong, it has to be demonstrated according to the law. We liken it a little bit to defending yourself in Court. Sure – you may be able to defend yourself, but your case has much more chance of success if you use a legal professional.

    For help to obtain a copy of your credit report, and advice on how to tackle your credit rating defaults contact a MyCRA Credit Repair Advisor on 1300 667 218.

    Image: Grant Cochrane/ www.FreeDigitalPhotos.net

  • Bankruptcy and Debt Agreements should be a last resort for debt struggles.

    debtMedia Release

    Bankruptcy and Debt Agreements should be a last resort for debt struggles.

    17 January 2013

    Australians experiencing severe debt problems are turning to Debt Agreements over Bankruptcy, with a recorded increase of 68% in Debt Agreement numbers since 2007, but a consumer advocate for accurate credit reporting warns that both alternatives fall under the Bankruptcy Act 1966, and should be encouraged only as a last resort for consumers struggling with debt.

    New figures provided by Insolvency and Trustee Service Australia (ITSA) show that bankruptcies declined 20% between 1 January 2007 and 31 December 2012, with 150,353 bankruptcies recorded during this period. During the same period, there were 49,034 new debt agreements made, which represents a 68% increase.[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]

    Reforms to the Bankruptcy Act in 2007 in the form of the Bankruptcy Legislation Amendment (Debt Agreements) Act 2007, aimed to improve the operation of the debt agreement regime.

    Attorney-General Nicola Roxon recently said debt agreements provide better outcomes for someone’s financial circumstances, and may allow those people in debt the chance to save their home.

    “Debt agreements give many Australians in financial distress an alternative option to get back on their feet sooner than bankruptcy,” Ms Roxon said.[ii]

    “Debt agreements in many cases can be the smarter way forward especially as bankruptcy can leave a financial legacy that can affect people for years.”

    But CEO of MyCRA Credit Rating Repair, Graham Doessel says whilst formal Debt Agreements may be preferable to Bankruptcy in many cases, it is important for consumers to know that both options are part of the Bankruptcy Act 1966, and therefore when proposed or implemented, record a Bankruptcy Notation on the consumer’s credit file.

    “A formal Debt Agreement may be a nice form of Bankruptcy, but make no mistake – it is still part of the Bankruptcy Act 1966. Both options will impact a consumer’s credit file and ability to obtain credit for 7 years. But what’s more, the debtor will be allocated a Bankruptcy number, which remains part of their credit history for life,” Mr Doessel says.

    The debtor’s name and other details appear on the National Personal Insolvency Index (NPII), a public record, for the proposal and any debt agreement.[iii]

    He says other than difficulties obtaining credit, having a Bankruptcy recorded can also impact business situations, and in some cases may impact employment opportunities.

    “You can’t get away from this notation, and answering the question ‘Have you ever been Bankrupt or entered into a Debt Agreement?’ incorrectly constitutes fraud,” he says.

    He says consumers owe it to themselves to exhaust all other options before they enter a Debt Agreement.

    “Talk to your Creditors – most don’t want to have to commence legal action against you, and will try to help you with repayment variations if they can,” Mr Doessel says.

    If Creditors have not commenced legal action yet, a consumer struggling to make repayments may be entitled to relief under financial hardship provisions.

    From March 2013, the Consumer Credit Legislation Amendment (Enhancements) Bill 2012 will take effect, allowing for greater ease of request for financial hardship variation and will generally be encouraged as a deterrent to any kind of credit file blemish or prior to someone having a court Judgment or a last resort-Bankruptcy filed against them.[iv]

    Mr Doessel says it is important for people not to bury their head in the sand, and to recognise and address financial difficulty early.

    “By catching it early, and avoiding a Default, Writ, Judgment or Bankruptcy on your credit file, when you’re back on your feet you could have the option to borrow again – even for basics like a credit card or mobile phone plan,” he says.

    ‘Dealing with debt: Your rights and responsibilities’ is a government publication which gives people information on dealing with debts, debt collectors and disputes. It is available through the ASIC (www.asic.gov.au ) or ACCC websites www.accc.gov.au.

    /ENDS.

    Please Contact:

    Graham Doessel – PH 3124 7133

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

    http://www.mycra.com.au/ 246 Stafford Road, STAFFORD QLD. Ph: 07 3124 7133

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

    ——————————————————————————–

    [i] http://www.itsa.gov.au/dir228/itsaweb.nsf/docindex/Statistics+%26+Research-%3EStatistics

    [ii] http://www.attorneygeneral.gov.au/Media-releases/Pages/2013/First%20Quarter/10January2013-Debtagreementsbetterpaththanbankruptcy.aspx

    [iii] http://www.itsa.gov.au/dir228/itsaweb.nsf/docindex/Bankruptcy-%3EPersonal+Insolvency+Information-%3E3.+Debt+agreements

    [iv] http://www.mondaq.com/australia/x/175676/Consumer+Credit/Treasury+releases+amended+NCCP+Enhancements+Bill

    Image: renjith krishnan/ www.FreeDigitalPhotos.net[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

  • How to Avoid Sexually Transmitted Debt

    sexually transmitted debtBeing ‘in love’ is one of the best feelings in the world, but not one of the most practical states to be in. Sometimes personal financial values go out the window and people lose themselves in the process of adding to the ‘relationship’ and creation of ‘us’. But at some point the boring old finance stuff becomes vitally important. We look at what you need to do to prevent STD impacting your credit file.

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

    Many people run into trouble by not asking the tough financial questions about their prospective partners early in the relationship. 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.

    What’s your money personality?

    Are you a spender, a risk taker, a saver or a security seeker? There are many different types of money personalities – and you could be combination of both. If you and your partner are different money personalities, this may be the cause of arguments.

    When two different money ‘personalities’ combine, it may be all rosy to begin with, but at some point you are going to disagree about money. Fights can begin and the potential for both of you to be financially damaged is greatly increased.

    According to Relationships Australia, conflict over money is one of the top causes of arguments and relationship breakdowns in Australia.

    When there’s joint finances involved in the split, sometimes you can continue to fall under the financial shortcomings of a partner well after the relationship is over.

    When people take out any credit together, such as loans, utility accounts, homes and rental properties, they become very reliant on the partner to keep up their end of the credit repayments.

    Who is liable for debt?

    Sometimes one partner ends up with a bad credit score, simply because the other person on the account has not kept up with repayments. People can be unaware their partner (or ex-partner) is generating defaults on their credit rating until it is too late.

    The most common type of negative listing is a default, and is placed by the creditor when an account holder fails to make payments past 60 days.

    In many instances it’s not until people apply for credit in their own right that they find out they have a default against their name. The relationship may even have ended years ago and the partner is still paying for it.

    Bad credit history can last for 5-7 years, depending on the listing type.

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

    How to Prevent Relationship Debt

    1. Consider taking a Money Personality test, such as the one at www.TheMoneyCouple.com

    2. Ask about your new partner’s financial past. People will do what they have always done. If they have financial skeletons in the closet it is possible they will continue this behaviour in the future.

    3. 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?

    4. 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?

    5. 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?

    6. 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. You can order your credit report here http://www.mycra.com.au/credit-file-request/.

    If you are unsure of your new partner’s financial compatibility, it could mean finances need to be fairly separate for a significant period of time.

    But the most important aspect to the meeting of financial minds is to keep an open dialogue about money. Talking freely and honestly, preferably keeping the emotion out of your discussions may help to avoid surprise bad credit from your partner.

    Image: David Castillo Dominici/ www.FreeDigitalPhotos.net

  • Are you getting bad credit for Christmas?

    Media Release

    Are you getting bad credit for Christmas?

    An advocate for accurate credit reporting warns every credit-active Australian should make sure they’re not getting bad credit for Christmas, as surprise bad credit can happen to anyone, even those who pay all their bills on time.

    CEO of MyCRA Credit Rating Repair, Graham Doessel says it is important for Australians to understand how easy it is to wind up with a bad credit rating and not know it.

    “There are no class lines, whether rich or poor if you have taken out credit then you could be at risk. I would like to say it is always cut and dried – don’t pay, get bad credit but in reality it’s not that simple. The only way to be sure is to check your credit file regularly,” he says.

    A default listing can be placed on a consumer credit file if a bill payment is late more than 60 days.

    But Mr Doessel says there are many reasons why a consumer can be defaulted other than simply choosing not to make bill payments on time.

    “Creditors don’t always comply with the law, and sometimes they make mistakes – wrong names, wrong addresses, as well as human and computer errors,” he says.

    He also says certain circumstances can leave consumers more vulnerable.

    “Identity theft, separation from your spouse, bill disputes, overseas trips and even moving house would definitely be situations where afterwards I would be checking my credit file to make sure it was clear,” he says.

    Mr Doessel says unfair credit listings should be disputed, as negative listings such as defaults will mean credit refusal or higher interest rates for the term of the listing.

    He says listings are not removed by creditors unless the credit file holder or a third party acting on their behalf can provide adequate reason and lots of evidence as to why the listing shouldn’t be there.

    “It’s not easy to dispute a credit listing – but it is a point worth fighting for,” he says.

    Consumers are entitled to obtain a free copy of their credit report from Australia’s credit reporting agencies once per year. This is sent within 10 working days of the request.

    “If you have some time off soon, this might be a great time to do your credit file check. If there is something amiss on your credit report, you can dispute it with your Creditor yourself or you can contact a professional credit repairer to do it for you,” Mr Doessel says.

    People can visit http://www.mycra.com.au/credit-file-request/ for help to get their free 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 Repair is Australia’s number one in credit rating repairs. We permanently remove defaults from credit files.

    Image: posterize/ www.FreeDigitalPhotos.net

  • Have Your Say on Bill Shock

    Ever been overseas and returned home to find your mobile phone bill is as expensive as your plane ticket? You’re not alone. You may get a chance to have your say on what the telcos should do to stop bill shock and curb the excessively high data roaming charges which can see you in debt and threaten your credit rating in a new public consultation seeking to lift the telco industry.

    By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repair www.fixmybadcredit.com.au, https://www.facebook.com/FixMyBadCredit.com.au.

    The Government is welcoming public consultation on new standards to help Australians avoid bill shock while using their mobile phone overseas.

    As part of new guidelines for Telcos, set out through the new Telecommunications Consumer Protection (TCP) Code, the Australian Communications and Media Authority (ACMA) will begin consultation on developing an industry standard to help Australians best receive timely information about international roaming costs when they travel.

    Minister for Broadband, Communications, and the Digital Economy, Senator Stephen Conroy, said in a media release late last week that Australian consumers are being price gouged by telecommunications companies every time they want to make a mobile call, send a text or go online, when overseas.

    “The industry standard will be an important transparency measure. People will receive clear information about pricing, allowing them to better manage their spending and avoid bill shock.

    “We also expect that the extra scrutiny provided by the standard will encourage telecommunications companies to reduce their obscenely high prices and give consumers a better deal when they travel.”

    “I encourage everyone to have their say during this public consultation, which ends on 25 January,” Mr Conroy said.

    Here’s what the current draft standard proposes:

    A traveller receives two SMS messages when they switch on their phone when arriving overseas. The first would be sent within 10 minutes, warning the customer that extra charges will apply and allowing them to switch off international mobile roaming services.

    The second would arrive within 1 hour and must detail the cost for a standard call, an SMS, and 1Mb of data.

    The standard also requires mobile phone companies to develop cost effective monitoring tools for consumers to use when they travel overseas.

    The new standard is expected to be in operation by the middle of next year.

    In the past, we have found many times the telco customer has had difficulty disputing their phone charges before they are issued with a credit default. These credit listings can be hard to fight. Often the customer will say what they had first understood the plan to be for, or what they wanted the phone to do, was not what eventuated. This can come down to a he-said she-said situation, and the telcos – with all the power on their side can often come out on top.

    As credit repairers we see many telco customers for various reasons – in fact almost 26% of our credit repair clients have telco credit listings they need removed. Many complain of confusion over bills, date allowance and plans and also difficulties with resolving disputes – which see customers with bad credit even though they had been attempting to sort out the bill discrepancy.

    The multitude of official complaints in the area of ‘bill shock’ resulted in a major inquiry by the ACMA and the report – Reconnecting the Customer. This examined the root causes of the industry’s poor customer service and complaints-handling performance. The telco industry was asked to regulate or be regulated – and so the TCP Code was developed by the Communications Alliance (CA), and a final draft was registered in late July.

    That TCP Code came into effect on 1 September 2012. If the code proves to be effective, there will be significant positive changes for telco customers. This public consultation and is one such proposed change coming to fruition.

    So get in and have your say,

    ACMA public consultation: http://www.acma.gov.au/WEB/STANDARD/pc=PC_600133