MyCRA Specialist Credit Repair Lawyers

Tag: default;

  • Why Bankruptcy and Debt Agreements should be a last resort for debt struggle

    Struggling with debt can be the worst feeling, and the weight is so heavy it can even leave people feeling lost and depressed. There are so many reasons why someone may be going under with debts, but before you go Bankrupt, or enter into a Debt Agreement, make sure you have exhausted all your options.

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

    Last week, a post on credit card debt from Savingsguide.com.au caught my interest. It covered what to do if you are in debt…deep. It explores the option of Debt Agreements.

    Debt and its ramifications is a subject close to my heart, as both a former bankrupt, former broker and now credit file repairer.

    So how did I end up bankrupt? Essentially I took the wrong advice. I declared bankruptcy when I thought it was the only option. But let me tell you, there are a host of other options out there, all of which may be a better choice long term.

    It all started when I had my promotions company. It was doing pretty well. I had some high-end contracts even securing a McDonald’s contract. But finance was not my strong point (well not then anyway!) I needed to get someone in to help me with the accounts. I brought in a mate who I thought could do that side of things for me. But over four months he ended up stealing $135,000 which I had borrowed for the business and left me broke, with no way to make loan repayments.

    I sought legal advice straight away, and was told my only option was to declare bankruptcy. This didn’t sit well with me, but up to my eyeballs in debt, I reluctantly proceeded with it.

    I was then chatting with another lawyer, who said it didn’t have to be my only option. I rushed to attempt to have the bankruptcy halted or reversed, but it was no use. After to-ing and fro-ing with the authorities, it turned out I was stuck in the bankruptcy until the end of the term (three years).

    I couldn’t believe there could be such conflicting advice out there especially at a time of significant financial stress.

    So what did I learn about this experience, along with the knowledge gained as a broker and a credit repairer that can help you in a situation of debt?

    What It Means To Have a Bankruptcy Notation

    Both Bankruptcy and Debt Agreements – Part IX and Part 9 are an act of bankruptcy and fall under the Bankruptcy Act 1966. Because of this, both types of agreements will be noted on your credit file for 7 years which impacts your ability to obtain credit during this period. But what’s more, you will be given a Bankruptcy number, which remains part of your credit history for life.

    This Bankruptcy or related notation, will be a permanent record on your NPII (National Personal Insolvency Index).

    Having this in your past can also be disadvantageous to you in other situations. You could be asked whether you have ever had a Bankruptcy or Debt Agreement notation on your credit file at job interviews, in business situations, when being party to different organisations, when you apply for credit, even when trying to get a mobile phone on a plan –  and answering incorrectly constitutes fraud.

    So what are some solutions for people in deep doo doo other than entering Bankruptcy or Debt Agreements?

    Talk to your creditors

    I can’t stress how important it is to not bury your head in the sand in these situations. Talk to your Creditor about what they can do to help you.

    If Creditors have not commenced legal action yet, you may be entitled to relief under hardship provisions. It is essential to investigate this option.

    Most creditors don’t want you to go bankrupt. Most are willing to help you work out some kind of payment plan. If you tell them about your ‘financial hardship’ circumstances, and use those words, asking for a variation in your payments they will often accommodate you.

    In fact, with new laws having just been passed in Parliament this week, from March 2013 this process will be much easier and generally it is 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. See more info on the Consumer Credit Legislation Amendment (Enhancements) Bill 2012 and what the benefits might be for you.

    Money Help, a website run by the Victorian State Government offers some help on how to apply for financial hardship variation with creditors in the correct way.

    “If you wish to ask for hardship consideration, it is always better to put your request in writing as this means you can keep a copy of the request as a record. It is more difficult to prove the details of a request made by phone. If you entered into your loan agreement after July 1 2010, or if your debt relates to a credit card, then your credit provider must respond to you within 21 days of your application.”

    Money Help advises people to work out what they can afford to pay prior to requesting a financial hardship variation. They explain the benefits in applying for hardship can range from more affordable payments, to putting a stop on action towards defaulting your credit file.

    My extra tip is for you to make it clear to the creditor what you are requesting. It would be a good idea to specifically request a ‘financial hardship’ variation to your repayments – in writing, so there is no confusion.

    If the Creditor refuses to consider your variation request, you may be able to contact the Ombudsman Service for the Creditor’s industry to escalate your request.

    What about if the creditor has already issued a default?

    If despite sorting out varied terms in your repayments with your creditor (which you are currently making), you find you have a default on your credit file, you may have grounds to request its removal.

    Basically, if a default has been issued which you believe is unjust, unfair, in error or shouldn’t be there, you have the right under Australian credit reporting legislation to have the inconsistency rectified.

    The problem with seeking redress as an individual is two-fold. Firstly, without extensive knowledge of credit reporting legislation it can be difficult to enforce ruling that creditors are bound with without knowledge of what the rules are.

    Secondly, people negotiating on their own behalf can run into problems in many cases. People have often attempted to remove the default themselves, and have been told defaults DONT EVER get removed. The best they can do is mark the listing as paid (if it’s been paid).

    Alternatively, a professional credit rating repairer works with creditors to negotiate on your behalf and work for the best outcome based on the creditor’s compliancy with the current legislation. They will also look at any other extenuating circumstances to determine if there is an avenue that can be investigated which results in having the listing removed.

    Contact us for more information at www.mycra.com.au or tollfree on 1300 667 218 for consultation with a professional credit rating repairer.

    Sacrifice and struggle is better than bankruptcy

    Some people prefer to just write off the debt, declare bankruptcy and not go through the struggle of making repayments on the debt, but let me tell you, looking for a reduction in payments or settling the debt at a lower amount is an option preferred by many Creditors, and should be preferred by you.

    Firstly, you may be able to avoid a Default or Judgment on your credit file, meaning when you’re back on your feet you might be able to borrow again and secondly, more doors are open for you in terms of job and business opportunitites without having that notation on your NPII.

    If legal proceedings have commenced it may not be lost

    Even if a Judgment has been filed against you, you still may be able to work something out with the Creditor in terms of repayments. You may be able to file an application for an Instalment Order, which gives you time to repay the debt and or ask for a reduced settlement.

    Please Note – This information is provided to help you in your research into debt management and should not constitute legal advice or replace getting professional financial advice from a financial counsellor. The Australian Competition and Consumer Commission Website directs people to where to go if they need help with debt, and we encourage you to seek help from them and do more research before making any financial decisions http://www.accc.gov.au/content/index.phtml/itemId/815382

    Image 1: nuttakit/ www.FreeDigitalPhotos.net

    Image 2: Grant Cochrane/ www.FreeDigitalPhotos.net

  • New Credit laws passed Parliament yesterday which may protect those who need it most

    It’s not the long awaited comprehensive credit reporting, but it is the Consumer Credit Legislation Amendment (Enhancements) Bill 2012 passed by Parliament yesterday and waiting for Royal Assent. The reforms will among other things, alter laws around financial hardship, and put the first national cap on payday loans – which should assist those people who are struggling with credit and access to credit. We look at what this Bill will and won’t do for people on the fringe, or people who are under hardship, and what the implications will be in terms of their credit file and maintaining a good credit rating.

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

    For someone who is struggling with debt, keeping your head just above water and avoiding defaults is the best thing you can do for yourself. This is why the ‘streamlining’ of laws around financial hardship is so important. For someone who is suffering temporary hardship to be able to discuss alternative arrangements with their lender other than being hit with a default on their credit file is so vitally important because if they are unable to secure a hardship variation, the consequences can be dire – which starts with defaults, and can end with more debt and defaults.

    The consequences of having a negative credit listing, whether that be a default, a Judgment, a writ or a Clearout is generally a ‘lock-down’ of mainstream credit services for the term of the listing which is between 5 and 7 years. Once that lower-interest option is no longer available to you, it’s time to seek aid in other areas, especially in times of emergency. So that is where the payday lenders come in, or non-conforming lenders in the mortgage marketplace. These lenders have a bigger ‘risk’ because you may have a bad credit record, so they charge more in interest to offset that risk.

    The Government has decided to crack down on payday lenders and cap their interest rates. Minister for Financial Services Bill Shorten said in a statement to the media yesterday, that these reforms will stop loan sharks from exploiting vulnerable Australians:

    “These laws will place reasonable limits on what lenders can charge. The cap on costs appropriately balances consumer protection while still allowing lenders a return that is commercial.”

    “The Gillard Government has moved to reduce the financial harm caused by lenders who ruthlessly impose excessive fees and charges simply because vulnerable consumers cannot obtain alternative access to credit. These reforms continue the Gillard Government’s ongoing commitment to deliver a fair go for all Australians,” explained Mr Shorten.

    The Enhancements Bill introduces a cap for small amount credit contracts where the amount borrowed is $2000 or less, and the term is 1 year or less. For these loans the maximum any lender can charge is an establishment fee of 20 per cent of the amount of credit upfront and 4 per cent for each month of the loan. This provides for maximum charges of $72 on a loan of $300 over 1 month.

    The legislation will also introduce a number of other reforms according to Mr Shorten:

    • Applying a cap to other credit contracts based on the 48% cap currently in force in some Australian States. The Commonwealth cap addresses the range of avoidance techniques lenders currently have devised to avoid that cap.
    • Responsible lending obligations to address high risk conduct by small amount lenders.
    • For seniors who use reverse mortgages, greater certainty as to future outcomes when they enter into such contracts that the amount they are required to pay cannot exceed the value of the equity in their home (through a no negative equity guarantee).
    • Simplifying the procedures for borrowers to apply for a variation to their repayments on the grounds of financial hardship, as it is in the best interests of both parties to try and resolve these situations as quickly and simply as possible.

    Some objected to the Bill, saying the Government had effectively gone soft on the payday lenders.

    In The Australian, Greens Senator Sarah Hanson-Young said the final version was so weak it could have been written by the loan sharks.

    As a credit repairer, I am of the view that any restriction on interest rate for pay day loans is a welcome move. But I see the bigger picture. Some people who are forced into these situations are there because the system has failed them. Not all defaults deserve to be there, but they all have the same outcome for prospective borrowers. They are banned from obtaining mainstream credit.

    Where people are getting let down is in copping the mistake in the first place, and also in the correction of the credit reporting mistake. Whilst the powers that be say that there is a legitimate avenue for correcting credit reporting mistakes for the individual, any consumer who has had the pleasure of dealing with a big company for even small issues will attest to the difficulty in getting a straight answer, getting someone who knows what they’re talking about first time, and ultimately correcting the mistake. This is a common complaint of many of our credit repair clients. Most people are told if it’s paid up they can mark it as such but that’s about it. It’s a bit like David and Goliath, and in the end many just go away believing they are in the wrong.

    So in an emergency situation, people who are stuck with bad credit must turn to payday loans. Including those people that aren’t able to obtain a hardship variation for their circumstances, and have a default or other negative listing placed on their credit file.

    So I do applaud the new laws, but it’s not over yet.

    I am still waiting to see how the new credit laws within the Privacy Amendment Bill will impact on the ease of correction of mistakes in credit reporting as well as how overdue payments are going to impact their ability to get mainstream credit before I hang my hat up and say that the Government has done all it can to help vulnerable consumers and give a ‘fair go for all Australians’.

    If you are struggling with obtaining credit after being defaulted, and you believe the listing may be incorrect or unjust in any way, consider credit repair as an option to get an expert on your side who can help permanently remove unlawfully placed Defaults, Writs, Judgments and Clear-outs from your credit file. Call a Credit Repair Advisor today on 1300 667 218 to discuss whether you might be a suitable candidate for credit repair.

    Image: Daniel St.Pierr/ www.FreeDigitalPhotos.net

  • Fixing credit mistakes with a credit repairer – 15 common concerns

    Credit rating repair is a relatively new field and has been fuelled by just how difficult it can be in this economy to obtain credit. The loops and hoops people have to jump through – on top of the massive deposit they need to save, means people can’t afford for bad credit to stand in their way – particularly when they suspect it shouldn’t be there in the first place. If you are one of those brokers or prospective borrowers who are unsure whether credit rating repair is a legitimate option for you or your clients – we might be able to alleviate some concerns.

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

    15 COMMON CONCERNS WE HEAR EVERY DAY AS CREDIT REPAIRERS…

    1. Does the debt need to be paid?

    As we are an evidence based firm, it doesn’t matter if the debt was paid or unpaid. The service is in looking for whether the listing was legitimate or not rather than necessarily appeasing a creditor’s request for payment initially.

    2. Won’t just paying the listing allow me (or my client) to obtain finance without needing credit repair?

    Most clients believe that paying the default or judgment will “make it all right again” only to find out that a PAID default is almost as bad as an UNPAID default to many lenders. Only a CLEAN credit rating will ensure your options are not unnecessarily limited.

    3. When can a listing be removed from my credit file?

    If a listing has been placed correctly, it cannot be legitimately removed. However, in as many as 91.7% of cases the listings HAVE NOT been placed correctly and in accordance with legislation and are successfully removed.

    4. If the creditor says “no” is their decision final?

    Most definitely NOT! In fact in most cases, the Creditor will say No, No, and No again…this is why most times it is difficult for an individual to dispute their own credit listing themselves. The difference in using a credit rating repairer is based on our thorough knowledge of credit reporting legislation and industry legislation, we go about proving that the Creditor has NOT complied with the legislation and the default has been placed unlawfully and requires immediate removal.

    5. Is a default with a small debt amount easier to remove?

    Unfortunately this is not always the case. The dollar value of the debt makes very little difference – there can be just as much work in removing a small debt as a large one – as in most cases it is about doing the work to show unlawful placement of a credit listing. This is why MyCRA does not charge per debt amount. Because as you may already know – defaults for as little as $100 can stop someone from getting a home loan.

    We use a tried and tested system that has seen the successful removal of defaults from $100 to one at $750,000.00.

    6. Can you provide a time frame on removal?

    We’d love to say that all creditors follow the rules and comply with our requests within the legislated timeframes but hey, we’re here because in so many cases they DON’T comply.

    In most cases the delays are directly attributable to further non-compliance by a creditor – we can never know how long they’ll take to respond. The best anyone can do is give average timeframes.

    7. What are the average time frames?

    We have removed listings anywhere from 12 hours and 23 minutes (business hours) right through to almost a year.
    On average, we let clients know they should aim for 45 – 60 days. But of course this is no guarantee, as every case is different, and we don’t know how long it will take until we actually get the word that we’ve got the creditor to agree to remove that listing.

    8. How do I measure the costs involved?

    We like to think we offer excellent value with our rock solid commitment to ride the creditor (as much as we legally can) until ALL possible avenues are fully investigated to the maximum extent commercially open to us. Like a dog with a bone, we don’t give up. If you were to engage a Lawyer at say $350 per hour, it’d cost more than $5200 per default and still have no guarantee of success, so yes, we’re great value.

    Some people feel if there listing is only a small $$ value listing, that it should be easy and cheap to have it removed. The process for removal often includes Legislative Compliance Officers reviewing hundreds of pages of documents for each separate default listing and then comparing them to more than 2000 pages of legislation looking for that one (sometimes very small) point that would deem the listing unlawful and require its immediate removal. Our fees are fixed so there is no risk of them “blowing out” no matter how many hours we work on the case.

    To look at costs in another way, you can compare them with the amount you would pay in interest on a non-conforming loan.

    If you were to enter a non-conforming loan of $350,000 on a 30-year term at 9%, versus a standard loan at 7%, you would be up for an additional $487.62 per month. Over the first three years of the loan, that adds up to a staggering $17,554.34 just in interest alone – without taking into account set up fees etc. You can verify this and measure it against our costs here on the  MyCRA Credit Repair Calculator

    What can be removed???

    9. Can you remove commercial listings?

    Yes – we’ve had great success in removing commercial listings. Though a point to remember is that as there’s much less legislation protecting businesses, so in some cases it can take a bit longer.

    10. Can City Council Judgments be removed from my credit file?

    City council judgments can and do get regularly removed and in almost all cases, the process is sped up by our dedicated Judgment and Court Action Legislative Compliance Officers and full-time in house Legal Counsel.

    11. Can you remove credit card listings from my credit file?

    Credit Card listings are just like any other listing and can be removed as easily as any other.

    12. If I have paid the listing, does that mean it can’t be removed because I have effectively claimed fault?

    In a large number of the clients we help, many didn’t know they had an actual default until they were refused further credit. They may have had a rough spot or a disagreement with their creditor over the bill but it was all sorted out, the bill was paid and the client moved on. There still may be grounds for removal in many situations, and paid listings are removed just as regularly as any other listing type.

    13. If there is an unpaid amount, wouldn’t the creditor refuse to remove my listing?

    The creditor may not WANT to remove an unpaid listing, but if the creditor has not complied with the legislation relating to that default type, they have no choice – it MUST be removed.

    14. Can a discharged bankruptcy be removed from my credit file?

    Any acts of Bankruptcy, which include Part IX and Part XIIII Debt Agreements, are controlled by ITSA (Insolvency Trustee Service Australia) and the Acts of Bankruptcy are permanently recorded on the NPII (National Personal Insolvency Index). We do not remove bankruptcies.

    15. Do Default and Judgment removals follow the same process?

    We have developed very specialised proprietary systems for Court Judgment, Court Writ, Default, Clear-out and Overdue Account Listings. While many of the processes are similar in that legislation needs to be complied with, the Judgment Process stands out as being VERY different.

    We hope we have helped answers most of your common concerns. If you have any questions not covered here, please call one of our friendly and very helpful Credit Repair Advisors on 1300 667 218 for a no obligation chat. You can also find out more by visiting our main website www.mycra.com.au.

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  • Bad Credit Loans In Australia – Are They Right For You?

    After seeing a broker or bank – you find out you’ve got bad credit! After picking yourself up off the floor – you decide to proceed with that home or business loan anyway. But is your only option to seek out one of the many “bad credit” loans in Australia at a much higher interest rate? There could be an alternative for you…determining whether you have grounds to remove the bad credit tarnishing your credit file with the help of a professional credit repair firm. We have provided a basic credit repair suitability test in this post which you can use to find out whether it could be a better option for you than a bad credit loan.

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

    A bad credit report is a big deal. For between 5 and 7 years, you are generally refused mainstream credit with most lenders – especially in the current economic climate. Often people can’t even get a mobile phone plan.

    Despite this, many bad credit loans are available out there for people who are on the outer due to bad credit defaults and other credit listings. But do bear in mind, bad credit (non-conforming) loans generally come at a much higher interest rate, which could cost you tens of thousands more in interest just over the first three years of the loan. For example, on a standard $300,000 loan the difference in 2% from the standard variable rate of say 7% to a bad credit loan rate of say 9% could mean your family is paying as much as $15,046.57 more over those first three years just in interest. Use our credit repair savings calculator to find out what it could cost you.

    Recently savingsguide.com.au published a great article titled A Guide To Loans For People With Bad Credit. It features some pertinent advice about choosing a loan after being refused credit with a mainstream lender. It goes through the steps you may need to take to secure finance in Australia, and includes some final tips for securing a loan. The central tip is, prior to committing to a loan attempt to fix your bad credit issues first.

    “Loans for people with bad credit should really be a last resort, as opposed to the only option. See what you can do to repair your credit rating beforehand and hopefully begin looking for loans just as anyone else would,” savingsguide.com.au’s Alex Wilson says.

    Australians should not put up with bad credit if it shouldn’t be there…contrary to what a Creditor may tell you, bad credit in Australia can be removed from your credit file if it was listed unlawfully.

    If you’re not sure whether you would qualify for credit repair, take a glance at this suitability test. If even one of these 6 questions seems to fit your circumstances, you would be a good candidate for assessment for credit repair by a professional.

     

    Credit Repair Suitability Test

    1. Is the credit listing on your credit file unfair?

    If you believe the Default, Clear-out, Writ or Judgment on your credit file has been unfairly placed then you may have grounds to dispute the credit listing with your Creditor. A professional credit repair firm will build a case for its removal based on credit reporting legislation and also legislation pertaining directly to the Creditor’s industry and your specific circumstances.

    2. Is the credit listing on your credit file a result of identity theft?

    If you have been a victim of identity theft, the onus will still be on you to prove you didn’t initiate the credit. A professional credit repair firm can talk you through the steps to take once you have contacted Police which will help you to recover your good credit rating once again. The process will involve proving to Creditors that you didn’t initiate the credit in your name. It’s not always easy, but it’s a point worth fighting for.

    3. Have you been given the required notification of the credit listing prior to it being placed on your credit file?

    Creditors are bound by strict legislation when it comes to listing defaults, writs and Judgments on credit files. If you suspect you may not have been given the right notice by your Creditor, you may have grounds to dispute the listing and request its removal. It is essential that listings are placed accurately on Australian credit files, and we believe Creditors should adhere to Australian law at all times when placing listings on credit files. If you’re not sure it would be well worth calling a professional credit repair firm to assess your credit file for you.

    4. Does your credit report reflect that the Creditor has the wrong contact information for you despite you notifying them otherwise?

    If you have moved, sometimes bills get sent to your old address. Wrong addresses and phone numbers listed on your credit file can often mean the Creditor has not given you the appropriate notice or warning letters prior to the credit listing. If you think this has happened to you, then this mistake could mean the listing has been placed unlawfully on your credit file.

    5.  Is there an out and out mistake on your credit file?

    Creditors undergo system errors and issues all the time which can sometimes lead to credit listing mistakes. Human error is also a common reason for mistakes on credit files. Sometimes the wrong account can be attributed to you because of a similar name or mistakes with billing amounts or billing addresses can lead to debts you shouldn’t have. If you suspect a creditor may have made a mistake on your credit file, or you’re just not sure, contact a professional credit repair firm who can verify that for you and build a case for the credit listing’s removal from your credit file. It doesn’t have to be a big mistake to constitute an unlawful listing.

    6. Were you undergoing some kind of unusual hardship circumstances which you believe the Creditor has ignored prior to placing the default, writ or Judgment on your credit file?

    If you have told your Creditor you were undergoing financial hardship, then they are generally bound to help you make better payment arrangements as a solution to this hardship rather than immediately placing a credit listing on your credit file. If your credit report reflects this issue, a professional credit repair firm might be able to help you have this unfair listing removed.

     

    There are many more reasons why you might be suitable for credit repair based on your individual circumstances. If you would like an assessment for your suitability for credit repair, talk to a consultant at MyCRA Credit Rating Repairs who can assess how you might fare in removing bad credit before you commit to any bad credit loan in Australia.

    Image 1: Stuart Miles/ www.FreeDigitalPhotos.net

    Image 2: Master isolated images/ www.FreeDigitalPhotos.net

  • Women and Credit: What You Need to Know

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    Bad credit history plays no favourites, it can basically happen to anyone. Both sexes can be severely disadvantaged when it puts a halt on plans to borrow money. In this post we explore some issues around credit, women in particular may need to be aware of and show how important financial knowledge and independence is to ensuring a good credit history for both women and men.

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

    The title of this post came as inspiration from a blog post concerning women and debt.  The post was titled Build A Clean Credit History and it centred around the issue of women and credit and how women can sometimes let their partners have control of the finances to their own detriment. The blogger “Women In The Black” is a forum for women to discuss personal finance, saving, investing and ‎building wealth. ‎

    Women In The Black implores women to get involved in their own finances rather than leaving it to their partner, in order to build up a good credit history of their own.

    “I’ve heard stories of women in their 50’s, who are either divorced or widowed, and have had to begin managing their finances now, which they previously didn’t have to do. Be assured at some stage in your life, you’ll be the sole manager of your finances,” the post says.

    “No matter what age you are, you need to take an assertive fiscal approach to money. Focus on earning more money as well as managing your debts which will lead to a long clean credit history.”

    Both men and women need to be educated and ultimately responsible for their own finances, and particularly their own credit history.

    Here are some of the issues women may come across when it comes to their credit rating but this can apply to men as well…

    Not knowing about your finances

    Do you know how much your insurance is per year? Do you know when your registration is due, or how the phone bill is paid? Leaving all the repayments up to your partner and never verifying them is a recipe for disaster most of the time when it comes to your credit rating. Women should strive to make joint financial decisions with their partner, regardless of their income level and both women and men should know what is said about them on their credit file by applying for their annual credit file check once per year.

    Financial incompatibility

    Sometimes we can get mixed up with someone who ticks all the boxes on an emotional level, but who has very different ideas about money, or perhaps a debt-ridden past.

    It’s important to ask some tough questions about new partners – including whether they have any current debts, if they always pay their bills on time and generally how they feel about money. You could even go so far as to order a copy of your credit file – to prove to each other that you are both default-free!

    If their answers prove less than ideal – you might want to keep your finances separate especially if you have assets of your own.

    A tangled web of credit history

    At MyCRA we often see people who have been left with bad credit history due to the partner’s financial mistakes.

    You see, when you branch out and make a life with someone, inevitably the lines of whose credit is whose can become blurred. You can have a phone account in one name, electricity in the other, a mortgage in one or both. Often it doesn’t matter whose name is on it, as long as someone is paying it – it’s more a joint effort to get the household where it needs to go and you both figure it’s ‘yours’.

    But where this goes wrong time and again is at the point where couples are trying to divorce or separate.

    Then those blurred lines of credit history can be extremely confusing, and often the divorcees’ credit histories can be mixed up long after they have physically separated. When you separate and there’s joint debt, you can lose control of your finances.

    Often we see people at the mercy of their exes’ big ‘post-relationship spendathon’ –  whether that be redrawing on the mortgage, or just taking out credit they don’t pay back – and sometimes both credit histories take the fall.

    Years later, when the woman finally gets back on her feet, she might want to get a house in her own name, or a car or even a credit card, and is refused due to bad credit that she hasn’t had any part of.

    One thing we maintain with everyone who is going through a divorce or a separation is to try to look forward into the future to what you need to do right now to prevent a bad credit score down the track.

    If you have just left your partner or spouse, here are 10 steps to financial separation you should take as early as possible in the break-up to keep your clear credit file. If these steps can be accomplished together, you can both get on with your lives as individuals without a bad credit score:

    10 Steps for financial separation

    1. Cancel joint bank accounts. Don’t hold on to joint accounts and assets ‘just in case’ you reconcile. Even the most amicable of separations can potentially turn sour down the track. The sooner you make the break, the better off your future will be – even if you do decide to get back together in the future.

    As far as creditors are concerned if the debt is in both names, then you are both responsible for it regardless of who accrued it. You could use the money from these accounts to go towards paying off any debts you may have together.

    2. Pay off and cancel joint credit cards. If the debt on the card/s can’t be paid off, inform the creditor that you have separated and ask them to put a stop on the account so there may be no more transactions. They could possibly make arrangements to transfer the repayments to two separate accounts.

    3. Resolve the mortgage debt. Sell the home and divide the proceedings, or sell your share of the home to your ex-spouse or vice-versa. Before this takes place, notify the bank you have separated. Make sure no further amount can be redrawn on the loan and that you receive separate statements whilst you are separated and both still own the property.

    4. Transfer names on other accounts. Phones, electricity accounts, rental properties, rates, car loans and store credit should all be transferred to one name as appropriate.

    5. Pay any unpaid accounts. No matter who has accrued these debts, the creditors will still see you as responsible. Ensure all accounts are paid on time while they are in both names.

    6. Keep a record of all undertakings. Keep good paperwork and notes related to the separation, including cancellation or changes to any accounts for future reference.

    7. Employ a good family solicitor. Legal advice is important as it relates to children, family businesses, and property. Also if anything runs off course with the division of debt, they can give good advice on the next course of action.

    8. Notify credit reporting agencies. Let Equifax (formerly Veda Advantage), Dun & Bradstreet, or Tasmanian Collection Services know of your separation and any steps you have taken to separate accounts to-date.

    9. Check your credit file. Request a copy of your credit report and check each entry.  A free copy of your credit file is available every 12 months from one or more of the credit reporting agencies in Australia. This is essential particularly if the settlement is drawn out over a number of years.

    10. Seek help from a professional credit repairer for any defaults, writs or judgments. Once outstanding accounts accrued by your spouse are paid, there is the issue of the bad credit score which needs to be cleared so you may have the opportunity to borrow again in the future. However, dealing directly with creditors could be problematic, they will tell you that defaults are never removed but can be marked as paid. However, at the moment even ‘paid’ black marks against your name can be enough for credit refusal, particularly if you are trying to buy a new property on one income.

    A professional credit repairer can check the creditor’s process of listing defaults for legislative and or compliance errors, any such errors could deem the credit file default listing unlawful, advising the creditor to remove the default.

    Image 1: twobee/ www.FreeDigitalPhotos.net

    Image 2: graur codrin/ www.FreeDigitalPhotos.net

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  • Help I have applied for my first home, but I have been declined! How do I fix bad credit?

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    Bad credit is common,  affecting millions of Australians and sometimes it goes undetected until your loan is DECLINED.

    This ‘surprise bad credit’ can see you declined on a home loan application. We show how it may have happened, and give you 7 steps to fix a bad credit report.

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

    Applying for finance for a home can be nerve-wracking. There’s the deposit – have I saved enough? There’s your income – do I earn enough? There’s the home – have I paid the right price?

    When all of these factors combine to give you, on the face of it, a good chance of approval for finance then there’s the issue of choosing the right home loan, at the right rate, with the right factors for your future. So you go through all of these sometimes stressful aspects of property buying, and you make the official application for finance with your chosen lender. It all looks good…

    Until you are slapped in the face with an APPLICATION DECLINED. You should qualify for a home loan, but you don’t because your credit report shows up with a default.

    You have no idea what the default is for…you always pay your bills on time…but that little default from what looks like a utility company, is messing with your future and caused the decline.

    How can they refuse me a home loan based on this, you ask? They can, and they do. You see, a default is an account in arrears greater than 60 days.

    If you have a default on your credit file, it tells the lender that you don’t pay your bills on time. They have a responsibility to ensure you can manage the debt you will accrue. This is evidence that you can’t manage your debts, you look like a risk to them, so they refuse you the loan, despite all the other factors being in your favour.

    What Do I Do Now?

    Now you know you have bad credit, you have two options. You can wait for 5 years. A default remains on your credit file for 5 years from the time it was listed, and after this time it ‘drops off’ your credit report. It will impact your ability to obtain credit generally for the entire time it is listed on your credit file. So – for 5 years you will have a hard time getting anything other than a credit decline anywhere, from mortgages to car loans to credit cards and even mobile phone plans.

    If you don’t want to wait, you can investigate whether it should be there at all.

    Mistakes can and do happen. Mistakes in credit reporting are most times only picked up by the credit file holder, so if you think there is something amiss with your credit file it is up to you to put it right.

    Here are the steps you need to take to correct errors on your credit file:

    7 Steps to Fixing Credit Reports

    1. Determine what account the default is for.

    If you don’t have a copy of your credit report, you will need to order one. If you haven’t ordered a copy of your credit file in the last 12 months, it will be free from the credit reporting agencies in Australia. They are Equifax (Formerly Veda Advantage), Dun & Bradstreet, and Tasmanian Collection Service (if in Tasmania). You may have listings with one or all of these credit reporting agencies. They will take 10 working days to send you a copy of your report. For a small fee, you can have one sent to you urgently.

    On your credit file, will be the company the default is with, and an account number. This should correspond with an account you have with them. If it doesn’t, or if you don’t have any accounts with the company in question, there is a good chance there may be a mistake on your credit file.

    2. Gather all your information first, and try and determine how the default got on your credit file.

    Before you call the company in question, sort out what you know about the situation. Have they made a mistake? How have they made it?

    4. Write to the Creditor to ask for information on the account.

    You may need to find out more about how the default got there. Every company keeps a record of its customers and you can write to them and request your account records to date.

    5. Decide on how you’re going to tackle them.

    Now you want to try and negotiate for the Creditor to remove your default. Don’t go in guns blazing – bear in mind, there is nothing to say they have to remove the default. Want you want to do is encourage them to do the right thing by you.

    6. It is going to be hard going.

    Most people find it really hard to correct their credit listing themselves –especially if it’s complicated. For one, the Creditor has to comply with a whole heap of legislation that crosses different codes, and if you don’t know legally where they may have made errors – it’s pretty hard to persuade them they have done the wrong thing. And who’s got time to learn all of that?

    Secondly, negotiating anything on your own behalf can be tricky – the old foot in the mouth routine can get you into trouble and see you stuck with the listing for the whole term. In reality, many people trying to fix their own credit rating get told they can have the listing marked as paid, but it is never removed. This is not enough to guarantee you the home loan. If you were able to show cause as to why the listing was put on your credit file unlawfully, there is a chance it will actually be removed.

    7. Consider getting a professional on board.

    For a pain-free approach – at any time, you can hire the services of a credit repair professional law firm. Most of them will look after getting a free copy of your credit file for you, order your documents from the Creditor as well as directly negotiate with them to remove your bad credit, based on the relevant legislation applicable to your case.  And most importantly, they will probably think of things you had never thought of to strengthen your case for the default removal. This is your best chance at getting the listing removed completely from your credit file, which will allow you to apply for finance with a mainstream lender again… Without the DECLINE!

    If you’ve done the crime, you may need to do the time

    If you’re a serial offender for late payments, if you are currently struggling to keep your head above water, then new credit- especially major credit such as a mortgage- is NOT going to make it all better. We don’t advocate wiping the slate clean because of a technicality, and contributing to your fall from grace once again when you default on your home loan. The credit reporting system was designed for you, to stop you from getting in way over your head and maybe 5 years without credit is a good time to learn some financial strategies for the future. This is where a decline can actually be helpful.

    But, if you firmly believe you are capable of making repayments on this home, if you know that the listing was put there unfairly, or perhaps even if the listing was accrued because you had a period of financial stress you have now recovered from and you weren’t helped in the appropriate ways at the time, then you may have a case for removing the default. If you are unsure, you can always talk to MyCRA Lawyers on 1300 667 218, who can make an assessment for you on your suitability for credit repair.

    Image: stockimages/ www.FreeDigitalPhotos.net

    Image: David Castillo/ www.FreeDigitalPhotos.net

     

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  • Cyber security is about protecting your credit rating.

    MyCRA is proud to be a partner for Cyber Security Awareness Week 2012, running this week from 12 to 15 June.  Awareness Week helps Australians understand cyber security risks as well as educating home and small business users on the simple steps they can take to protect their personal and financial information online. Today, we address the importance of cyber security for preventing bad credit history.

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

    Cyber Security Awareness Week 2012 is an Australian Government initiative, held annually in partnership with industry, community and consumer groups and state and territory governments. According to the Stay Smart Online website, cybersecurity awareness is more important than ever.

    “Australians are increasingly relying on the internet in their everyday lives for banking, shopping, education and communication. It is, therefore, important that they are able to use the internet in a secure and confident manner. The government has established a range of initiatives to raise the awareness of Australian internet users about the importance of cybersecurity and the simple steps they can take to protect their personal and financial information online.”

    One of the big risks for Australians is that their internet use will lead to fraudsters stealing their personal information for purposes of identity theft (now the fastest growing crime in Australia) and potentially fraud. The good credit rating of the victim could then be damaged.

    If cyber-crooks are able to get their hands on enough personal information they may be able to construct a fake identity, which can lead to some serious credit fraud. Fraudsters have been known to go so far as to take out personal loans, credit cards and even mortgage homes in their victim’s name.

    When the identity theft goes so far as to affect the credit file of the victim, the issues can be huge. Unfortunately fraudsters are never so kind as to pay this credit back, so the victim is often unaware of a stream of defaults run up against their name, until the apply for credit in their own right and are flat out refused.

    For between 5 and 7 years identity theft victims can be locked out of credit while their credit rating shows up someone else’s defaults.

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

    But the ability to obtain credit is so crucial to functioning well in today’s society, that if the identity theft victim has also been a victim of credit fraud, they should make their clear credit rating a point worth fighting for.

    Firstly, the victim should contact Police as soon as they are made aware of possible identity theft, they may even be able to prevent the credit fraud occurring. If it has already happened, a Police investigation and report will be a good starting point for proving the person did not initiate the credit in the first place.

    Credit file repair can be difficult for the individual, but if there is an error on a person’s credit file it is worth pursuing. It can be made easier with the help of a credit repairer. A credit repairer has extensive knowledge of credit reporting legislation and how to apply the letter of the law to the credit file holder’s circumstances to ensure the best chance of having the listing or listings completely removed from the credit file if it has been placed unlawfully, for instance if the listing contains an error, is unjust or just shouldn’t be there.

    The best thing people can do for themselves is to prevent that crime from happening in the first place. People can provide a safety buffer for themselves and their family around one of the main channels for fraudsters to enter our lives – the internet.

    To start, people can follow these top tips provided by Cyber Security Awareness Week 2012 on how to stay safe online:

    • Install and update your security software; set it to scan regularly.
    • Turn on automatic updates on all your software, particularly your operating system and applications.
    • Use strong passwords and different passwords for different uses.
    • Stop and think before you click on links and attachments.
    • Take care when transacting online – research the supplier and use a safe payment method.
    • Only download “apps” from reputable publishers and read all permission requests.
    • Regularly check your privacy settings on social networking sites.
    • Stop and think before you post any photos or financial information online.
    • Talk with your child about staying safe online, including on their smartphone or mobile device.
    • Report or talk to someone if you feel uncomfortable or threatened online – download the Government’s Cybersafety  Help Button.

    In addition, people can and should subscribe to the email notifications from Stay Smart Online Alert Service. The Stay Smart Online Alert Service is a free subscription based service that provides home users and small to medium enterprises with information on the latest computer network threats and vulnerabilities in simple, non-technical, easy to understand language. It also provides solutions to help manage these risks.

    Also, people can look at securing different sections of their internet use in more depth with the help of Stay Smart Online’s key factsheets for online security.

    They can also help raise awareness of the issue amongst their own group of family and friends and insist that anyone who has their personal information has a responsibility to keep it safe.

    People should also check their credit file regularly, and act quickly on any discrepancies there – which can often be the first sign of identity theft. Copies of consumer and business credit files can be ordered from one or more of Australia’s credit reporting agencies, and are free for the credit file holder once per year.

    Stay tuned for more information updates as Cyber Security Awareness Week unfolds.

    Image above: Victor Habbick: www.FreeDigitalPhotos.net.

     

     

     

  • Working away from home? This could impact your credit rating. How to keep your credit file clear when you’re working away.

    Australian miners – you may be the highest paid workers in the country, but in the credit rating repair profession, unfortunately you top the list as the occupation group most likely to get caught out with a bad credit rating. We tell you why you could be susceptible to a bad credit rating and how to ensure you keep your credit file clear – at home and away.

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

    If you are in the mining profession, a flight attendant, army personnel or any person whose profession takes you away from home, you can be likelier to suffer a negative listing on your credit file, namely because you can be away for long periods at a time, or because you can’t keep a close eye on day to day finances and accounts working such odd hours or geographical locations.

    Checking all bills are paid on time and that the account is running as it should be is often difficult when you’re a transient worker.

    Miners and other transient workers often set up direct debits for accounts, but this may not be enough to ensure your credit file remains clear. There can be a number of reasons why bills go to default stage – from correspondence not being read through to errors in the creditor’s billing system. Unfortunately transient workers often don’t receive notification that there is a problem until it is too late to rectify it and your credit rating suffers.

    MyCRA client and transient worker, Shannon recently had us assist in removing a Telstra default from her credit file.

    Shannon has worked as a chef in the mines for the past 8 years in Western Australia.

    She had recently relocated to Western Australia, but unfortunately for various reasons many of her bills were not forwarded on to her new address following the move. This included a Telstra bill, which unfortunately went into default.

    On top of not receiving many bills, she also received no notification  her bills, and in particular her Telstra bill was going unpaid. She also wasn’t notified of the default that had been placed on her credit file.

    It was only when Shannon applied for a home loan and was refused that she realised there was a problem with her account – and this is common.

    Shannon says she was probably at a disadvantage due to the nature of her employment.

    “In the mines, communication can be a problem. I can be out of contact for months at a time so it makes it difficult to keep on top of things. Telstra actually had addresses in their system that didn’t even exist. But this was the problem, I wasn’t getting all the correct information from where I was living, I had no idea the mail wasn’t coming,” she says.

    Shannon recommends anyone who works away from home have a Post Office Box to reduce the risk of mail being stolen or damaged in transit, and so that people can keep on top of their own finances, rather than having to rely on others.

    A credit file exists for anyone who has ever been ‘credit active’ and is used by creditors to assess risk and borrowing capacity of potential borrowers.

    The most common type of adverse listing is a default. Defaults are put there by creditors when accounts have remained unpaid for more than 60 days. Defaults remain on a person’s credit file for 5 years from the date of listing, and have the potential to severely impact a person’s ability to obtain credit.

    Currently, any default can be enough for an automatic decline with most of the major banks. Many lenders are even rejecting loans for excess enquiries such as two in thirty days or six within the year. Some people may even be unable to take out a mobile phone plan in their name if they have defaults on their credit file.

    It is a good idea to take a hard-line approach to your finances and bill notifications to ensure you are not caught out by issues that arise whilst you are absent from home.

    How to keep a clear credit file while working away from home:

    1. Reduce the amount of paper-bills that are sent. Use the internet for all bill payments or set up direct debits from accounts.

    2. Set up a Post Office Box, or appoint a trusted friend or family member to forward mail.

    3. Keep creditors up to date with changes on accounts. If there is ever a problem with bank accounts, or a change of credit or bank cards – ensure all direct debits are altered. This can be a common reason bills get left unpaid.

    4. Check up on credit accounts regularly. Make a point of checking your bills and making sure all payments are up to date.

    5. Don’t let bill issues slide. Take the time to sort out any discrepancies with bills as soon as possible. Accounts which are left unpaid for more than 60 days will be listed as defaults.

    6. Perform a credit file check regularly. Make sure everything is as it should be – including your current contact details and any credit entries. A free credit report can be requested from the major credit reporting agencies Veda Advantage, Dun and Bradstreet and Tasmanian Collection Service (if in Tasmania) every 12 months. A creditor may have listed defaults with one or all of these credit reporting agencies.

    7. Get inconsistencies fixed. If you find errors on your credit file, or feel a listing is unjust or shouldn’t be there, you do have the right to have incorrect information rectified.

    Miners and other transient workers are amongst the highest paid industries in Australia, but many of you are unable to utilise this money for big ticket items like cars and homes because your credit rating has blemishes. A credit rating repairer should be able to completely remove offending blemishes from your credit file, allowing you the chance to start with a clean slate.

    Contact www.mycra.com.au for information on how to repair a bad credit rating.

    Image: wandee007/ FreeDigitalPhotos.net

  • One in four Australians short of cash would default on mortgage

    More struggling Australian families than ever do not expect to manage their existing debt levels in the coming months. The numbers of families expecting to have to default on credit like mortgages, utilities, phone and internet bills in the coming months has increased. One in four Australians would default on their mortgage if they were short of cash. This is a worrying trend, and points to a continued lack of knowledge about the ramifications of defaulting on bill payments. For people who end up with bad credit history, they can potentially enter into a cycle of debt that can take years to recover from.

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

    Alarming statistics have arisen from Dun & Bradstreet’s Consumer Credit Expectations Survey from this month – projecting into the June 2012 quarter.

    Over a third of Australian families will struggle to manage existing debt levels, with nearly half (46%) of low-income households expecting difficulty managing their debt. This represents a rise of eight percentage points since the fourth quarter of 2011, 11 points above the national average.

    Here are some of the statistics coming out of this survey:

    Default expectations

    – Overall, more than one in four (26%) of Australian consumers who are short of funds would forgo a mortgage payment.

    – Of those families that do find themselves short of cash in the coming months, more than one in ten (12%) would default on a mortgage repayment or internet bill. Fourteen per cent of families would choose to default on their pay television account.

    – Nearly one in five (19%) low-income households would sacrifice an electricity bill, three percentage points above the national average.  While six per cent would forgo a mortgage repayment.

    – An increasing number of young Australians also plan to default on mortgage repayments if short of cash. The survey also found 18 per cent of 25-34 year-olds said this would be the first bill to be sacrificed during low cash flow periods. This also increased noticeably among West Australian (up 13 points to 20%) and Victorian (up six points to 11 per cent) consumers.

    Credit use expectations

    – Number of consumers planning to use redraw facilities on their mortgage to make a major purchase was up four percentage points year-on-year to 22 per cent.

    – 41 per cent of Australian households with children will be forced to rely on a credit card to cover living expenses, up two percent since late last year.

    – A growing number of households earning less than $50,000 a year are planning to use credit to cover costs (41%), up from 37 per cent in the December quarter 2011.

    – However, 27 per cent of families plan to apply for new credit or a limit increase during the June quarter.

    According to Dun & Bradstreet’s CEO, Gareth Jones, the survey results indicate a worrying cycle of debt accumulation and dependency among struggling consumers.

    “Nearly one-in-three low-income households expect rising household debt levels, but with limited ability to pay this down. When consumers are increasingly forced to accumulate debt they are unable to manage, just to keep the family finances afloat, this has the potential to quickly become a vicious cycle,” Mr Jones said…

    “Before consumers apply for more credit they should assess whether or not they can afford to repay the funds and check their credit report to ensure there are no black marks listed on their file that could make it harder or more expensive to get credit,” he said.

    These statistics show that we are just not doing enough to educate large groups of the Australian population on the ramifications of increasing debt, and the importance of meeting credit commitments. Unfortunately, we can’t do anything about the rising cost of living for them, but we can help people prioritise. There needs to be a major shift in the Australian psyche about all credit and a major education campaign on managing debt. I think if we don’t want to end up with some kind of credit crisis in Australia – it is essential.

    Gareth Jones puts it finely when he makes the point about how consumers view bill payments:

    “Consumers tend to view non-core expenditure such as phone or internet bills as dispensable, however the damage to an individual’s credit history can be an issue irrespective of the type of account defaulted on. The default will stay on a credit report for five years and can severely limit a consumer’s ability to access affordable, mainstream credit in the future,” Mr Jones said.

    The ramifications of overdue accounts

    Any credit commitment which is more than 60 days in arrears – whether that is a mortgage, a credit card or a phone bill – is considered an overdue account, and a creditor will list this overdue account on the consumer’s credit file as a default.

    A default on a credit file is considered a ‘bad credit rating’ by all major lenders, as well as phone and utilities companies.

    The consequences of a consumer having a default on their credit file is refusal of applications for credit through most mainstream lenders for 5 years from the date the default is listed on the consumer’s credit file. The consumer is then forced to either seek alternative credit – often at sky-high interest rates, or do without credit for 5 years.

    We worked out consumers with defaults on their credit file or a bad credit rating will be hit with a whopping average $15,046.57 or more in additional home loan repayments over the first three years of their loan (this calculation is based on a home loan of $300,000 over 30 years on non-conforming loan interest rate of 9.5% vs standard variable rate of 7%).

    What this could mean for Australian consumers

    If, as the Dun & Bradstreet Consumer Credit Expectations Survey predicts, the number of Australians who say they have to use credit to pay down debts is increasing – and the number of Australians who say they may default on credit is also increasing – we could see more and more people thrown into a cycle of having to find alternative credit sources at high interest rates as the only means of paying down debts. Or alternatively we could see a higher rate of bad credit history – defaults, Court proceedings and Bankruptcies across the board in Australia.

    When a consumer seeks credit rating repair, often times they have been uneducated on how they should have handled their difficult circumstances and particularly financial hardship, prior to the default being issued on their credit file. In this instance I believe the job of a credit rating repairer can be two-fold, in one instance we are repairing the credit rating, and in the second we are educating those consumers on what the correct procedure should have been when faced with that scenario.

    If more and more people are in crisis,  then the finance industry, credit industry and government as a whole need to tell struggling consumers about their options for managing debt.

    Consumers need to know throwing away their financial futures by defaulting on repayments is the last option, not the first when they are struggling with their debts.

    For more information on obtaining and managing credit, or for information on clearing credit rating inconsistencies through credit rating repair, contact MyCRA Credit Rating Repairs tollfree on 1300 667 218 or visit our website www.mycra.com.au.

    Image: renjith krishnan/ FreeDigitalPhotos.net

    Image: Pixomar / FreeDigitalPhotos.net

  • Small business credit hard to obtain

    An interesting article featured in Broker News today, for those interested in small business lending criteria, and small business credit files.

    It is harder than ever for small businesses to borrow. The story, titled ‘Lenders blasted for small business risk sums’ features Credit Reporting Agency, Dun & Bradstreet criticising lending criteria when it comes to small business.

    D & B says up to 400,000 small businesses who should qualify for finance are missing out due to the inability of credit providers to adequately assess and price their risk.

    Here is an excerpt from that story:

    Dun & Bradstreet has said that up to 400,000 businesses would immediately qualify for finance with a risk profile ranging from minimal to low, out of more than one million unincorporated businesses.

    CEO Gareth Jones said lenders have historically been hesitant about extending credit to small businesses as many are unincorporated entities with little or no commercial credit history.

    “Previously, it has been nearly impossible to appropriately assess small business risk as small businesses are often indistinguishable from their owner – the commercial and consumer entity are the same,” he said.

    “A holistic picture of small business risk can only be obtained by acquiring an understanding of an entity’s commercial and consumer profile,” Jones said.

    The comments came as Dun & Bradstreet launched a ‘Small Business Risk Score’ that brings together information from its database on both a commercial enterprise and its owner to enable risk assessments.

    The score predicts the likelihood of a small business entering bankruptcy over a 12 month period, based on factors including business to business payments, time since the last consumer default, and the volume of credit enquiries.

    The lines between personal and small business credit files do blur quite frequently. Often one credit file affects the other when creditors are looking at suitability for finance.

    To give people the best chance at small business credit, they should remove bad credit history like defaults and even excess credit enquiries from either or both credit files prior to applying for small business credit.

    It may be that credit file errors and inconsistencies are holding small businesses back from expansion – in which case there is a good chance they can be removed.

    For more information on bad credit history, contact MyCRA Credit Rating Repairs tollfree 1300 667 218 or visit the main website www.mycra.com.au.

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

    Image: renjith krishnan / FreeDigitalPhotos.net

  • Credit – friend or foe? 6 tips to make credit work for you

    Credit – friend or foe? Yes you should take advantage of credit, and we show you how to do that without blowing out repayments, and preventing a bad credit history.

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

    It is no secret that in this day and age many people are struggling with credit.

    Currently we are seeing lots of people running into trouble with their credit rating and the trouble sticks for 5 -7 years

    You could be forgiven for thinking that credit is the enemy…

    But we need to develop the ethos that credit is not something that is granted, it is something that is earnt. At one point banks were practically throwing money at us. Now it’s tough and you have to prove yourself.

    There is absolutely nothing wrong with using credit provided you make it work for you.

    In fact, if you have wondered ‘credit – friend or foe?’ consider what having no credit history will do for your ability to obtain credit. Not having a credit repayment history in this day and age can be just as difficult as having a bad credit rating when it comes to getting finance – especially a home loan.

    Where people come unstuck with credit is getting to a stage where they are forever chasing their tail with repayments, falling behind. Or getting blasé about repayments and not understanding what the consequences can be.

    Credit can be useful provided you make it work for YOU.

    If you can’t afford it now you can have the privilege of paying for it later – but understand that you will pay at some point. So if you don’t make your payments on time now – your credit file – your ability to take out new credit – will suffer for years to come.

    A bit about how a bad credit rating originates…

    Payments on any bills which are more than 60 days late can be listed as a ‘default’ on your credit file.

    This default can remain on your credit rating for 5 years, and can mean you are refused credit for this time. Even if the account was later paid, the credit reporting agency generally does not remove the default but can mark it as paid.

    Even defaults that you have paid still show on your credit report, and are considered bad credit history by most lenders. It is extremely important to keep a clear credit file because the repercussions will be felt for 5 years.

    Here are our 6 credit success tips…

    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. Repaying mobile phone plans, internet accounts, or store credit on time will appeal to anyone checking your credit score. Smaller purchases paid correctly contribute to approval for larger loans such as homes, vehicles and businesses in the future because they show a person’s ability to repay.

    2. MAKE REPAYMENTS ON TIME: Repay any bills received by the due date. Repay over the minimum amount required on credit cards. If you are having trouble paying on time, contact the creditor as they may be able to work out a payment plan rather than listing the non- payment as a default.

    3. HAVE A STABLE ADDRESS: Lenders like to see stability. Furthermore, defaults are easy to come by when bills are sent to the wrong address. If you do travel frequently, consider a trusted family member’s address for all bills.

    4. APPLY FOR CREDIT WITH CARE: You should only apply for credit if you feel you have a very good chance of being approved. Declined credit applications on a person’s file can hinder their chances of obtaining a loan. Likewise, you should only apply for credit you have full intention of pursuing. Every application is noted but does not stipulate whether it was approved or not. If you go shopping for credit and apply everywhere – it may look like you were declined everywhere.

    5. CHECK YOUR CREDIT FILE REGULARLY: You should check your credit file before you need to apply for credit. That way if there are any problems you can sort it out while there is no urgency, and save yourself embarrassment and disappointment from having credit declined. It is free once per year from the credit reporting agencies.

    6. DON’T LEAVE DEFAULTS TOO LATE: If there are defaults, don’t put up with them for 5 years – you may be suitable for credit repair. People can check with a credit file repairer if they can be removed.

    What about credit repair…

    Begin by obtaining a credit report – which you are entitled to do for free every 12 months via the major credit reporting agencies Veda Advantage, Dun & Bradstreet and Tasmanian Collection Service.

    If you find a default, writ or Judgment on your credit file which you believe is there unfairly, unjustly or just shouldn’t be there at all – it may be possible to have it removed.

    Credit repair is a difficult process. Time and again people are disheartened from trying to deal with creditors themselves to have the default, writ or judgment removed from their file. Most are told that default listings never get removed but can be marked as paid.

    Unfortunately, this is not enough to ensure credit is obtained in this current economic market. So basically those black marks mean you are stuck with a bad credit rating for 5-7 years, unable to borrow for homes, cars, businesses and take out simple accounts like mobile phone plans.

    Then the key is to establish a good track record on your credit file, using the above 6 credit success tips.

    Good luck!

    If you need help with repairing your bad credit history, contact MyCRA Credit Rating Repairs on 1300 667 218 or visit our main website www.mycra.com.au.

    Image: Stuart Miles / FreeDigitalPhotos.net

  • Financial hardship biggest reason for complaints to Credit Ombudsman

    Financial hardship cases are reportedly the biggest single cause of complaint to The Credit Ombundsman Service. This is where a consumer claims the creditor has issued defaults for late payment of accounts without considering the consumer’s claim of financial hardship. We look at why this is occurring, and what people can do in circumstances of financial hardship to ensure they do not receive a bad credit score from creditors.

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

    The Credit Ombudsman is continuing to be flooded with complaints. COSL’s annual report for 2011 released early this month showed a 72% increase in complaints from 2010, with financial hardship cases continuing to feature as the single largest source.

    Mr Raj Venga, Credit Ombudsman, attributed the significant spike in complaints received by his office to an increase in consumer awareness, and changes to legislation requiring lenders to enter external dispute resolution processes.

    “Regrettably, 34% of all complaints we receive relate in some way to financial hardship, specifically the failure of a lender to agree to a payment variation on grounds of financial hardship. This level of financial hardship complaints is similar to previous years and we do not anticipate a reduction in the forseeable future,” Mr Venga says.

    “The underlying causes of the financial hardship complaints we see are unemployment or reduced income (30%), cost of living, including other debt (21%), followed closely by illness of the borrower or their family member (19%), business failure (14%), interest rate increases (8%), relationship breakdown (7%) and natural disasters (1%)” observed Mr Venga.

    Broker News featured more on Mr Venga’s take on financial hardship issues, in its story ‘Hardship complaints show no signs of easing’. Venga says some lenders issued defaults too quickly.

    “We achieved a satisfactory outcome for the consumer in 46% of the financial hardship cases we closed. This suggests that not all lenders are, before issuing default notices or commencing enforcement action, properly considering the possibility that the borrower may be in financial hardship and whether a change in the borrower’s payment obligations may be appropriate in the circumstances,” Venga said.

    Creditors can be eager to issue defaults, and it is essential there is a system of redress for consumers – particularly when in times of financial hardship their requests are ignored.

    A bad credit score can be debilitating for the consumer for years after the event, with defaults remaining on a person’s credit file for 5 years from the date of listing. People are generally unable to even get a mobile phone plan let alone loans or mortgages.

    Applying for financial hardship

    If a person’s circumstances change due to unemployment, illness or some other reasonable change in circumstances, they should ask their lender for a hardship variation.

    Money Help, a website run by the Victorian State Government offers some help on how to apply for hardship with creditors in the correct way.

    “If you wish to ask for hardship consideration, it is always better to put your request in writing as this means you can keep a copy of the request as a record. It is more difficult to prove the details of a request made by phone. If you entered into your loan agreement after July 1 2010, or if your debt relates to a credit card, then your credit provider must respond to you within 21 days of your application.”

    Money Help advises people to work out what they can afford to pay prior to requesting a hardship variation. They explain the benefits in applying for hardship can range from more affordable payments, to putting a stop on action towards defaulting your credit file.

    Our extra tip is for people to make it clear to the creditor what they are requesting. It would be a good idea to specifically request a ‘financial hardship’ variation to their repayments – in writing, so there is no confusion.

    What about if the creditor refuses to agree to a hardship variation?

    Creditors are legally required to consider a person’s request for variation on payment arrangements, but are not obliged to agree to any hardship variation proposal put forward. This is the grey area that finds complaints being put forward to COSL in more frequency.

    If a lender either refuses or fails to respond to are hardship request within 21 days, (or a shorter time if the situation is urgent) consumers can lodge a complaint with the credit provider’s independent dispute resolution scheme.

    What about if the creditor has already issued a default?

    If a default has been issued which consumers believe is unjust, unfair, in error or shouldn’t be there, people have the right under Australian credit reporting legislation to have the inconsistency rectified.

    The problem with seeking redress as an individual is two-fold. Firstly, without extensive knowledge of credit reporting legislation it can be difficult to enforce ruling that creditors are bound with without knowledge of what the rules are.

    Secondly, people negotiating on their own behalf can be problematic in many cases. People have often attempted to remove the default themselves, and have been told defaults DONT EVER get removed. The best they can do is mark the listing as paid (if it’s been paid).

    This may be both unfair for the consumer and is generally insufficient to ensure credit is obtained with some lenders.

    Alternatively, a professional credit repairer works with creditors to negotiate on the consumer’s behalf and work for the best outcome based on the creditor’s compliancy with the current legislation. They will also look at any other extenuating circumstances to determine if there is an avenue that can be investigated which results in having the listing removed.

    Contact us for more information at www.mycra.com.au or tollfree on 1300 667 218 for consultation with a professional credit repairer.

  • How can I fix my bad credit rating fast?

    “Fix my bad credit” – Sounds good  – so what’s that all about? As credit rating repair specialists, we get asked time and again to rebuild your credit history so you can get that car, that home, that credit card or basically restore your financial future. Here is a look at how we can help you rebuild your credit and rebuild your life.

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

    “Hello MyCRA Credit Repairs. I am going for a home loan, and the broker tells me when they checked my credit report, they found a default against my name. I had no idea! How can I find out what went wrong and how I fix my credit rating? Our family really has its heart set on this house and it looks like we’re going to lose it! Can you fix my credit report so I no longer have a default?”

    This is the story of many of our clients. It is not until they apply for credit that the lender obtains a copy of their credit report.  It can be devastating to find out you have a bad credit rating and even more devastating to know that your dreams of owning that home could be slipping away because of it.

    Let me tell you, it might not be all lost.

    If there are any adverse listings on your credit file which you believe are incorrect, contain errors or just should not be there – then you have the right to have those credit file errors removed.

    The problem with attempting to dispute errors on your credit file with creditors yourself is two-fold. Without knowledge of the legislation, people almost invariably get caught in legal ‘loop-holes’ which see the default, writ or Judgment left on the credit file, or at best see the listing marked as ‘paid’. Both of these results DO NOT give you that home or car loan as lenders still consider even a paid listing as bad credit history.

    Secondly, by talking to creditors themselves about credit file errors, people can accidentally ‘alert’ creditors to any mistakes they may have made in the initial method of credit reporting – allowing them to fix up their mistakes and negate the need to remove the credit file default which was placed in error.

    If you are just starting out and wondering “How can I fix my bad credit?” then the best course of action is to instill the help of a credit repairer before you do anything yourself. Ask them to check if they can rebuild your credit.

    What does a professional credit repairer do?

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

    If they are successful, you not only get help with removing errors, but many times you are able to start off with a completely clean credit rating. They have the ability to completely rebuild your credit rating, allowing you to start off with a clean slate and give you the opportunity to go for any loan you choose at the best interest rates.

    Find out more by going through these 6 simple steps to credit repair:

    Or call MyCRA Credit Repairs tollfree on 1300 667 218.

    Image: m_bartosch / FreeDigitalPhotos.net

  • MyCRA clients tell their stories: Telco mistakes threatening home ownership

    Two of our credit repair clients share their stories on how their good credit rating suffered at the hands of Telco mix-ups. Their stories demonstrate how bill and service disputes can be difficult for customers to resolve, and can ultimately lead to a bad credit rating.

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

    DANIEL

    A NSW client, Daniel and his young family were shocked when they applied for a home loan last year to find they were refused due to a whopping $8,000 debt and five years of bad credit when a botched phone plan with Telstra in 2006 came back to haunt them.

    Daniel was told by the lender there was no way he would be given a home loan with a black mark against his name – a mark Daniel says was a huge mistake.

    “I was on a 10MB plan initially, but wanted to start using the internet from my phone. I contacted Telstra to get upgraded to 1GB, which the operator agreed to. It wasn’t until I got the bill for $4,000 that I saw the operator hadn’t changed the data allowance and I was still on 10MB,” he explains.

    Daniel says he spent more than 3 months in contact with Telstra attempting to resolve the problem, and was passed on from one person to another.

    “All the operators said they didn’t have the authority to remove this bill or change it. No one was willing to help they all just kept passing me around operators which lead to hours on end being caught up on the phone without getting answers,” he says.

    “After a few months they disconnected my phone, but I had no idea they had referred the debt to a collection agency, and banned me from credit for 5 years.”

    Thousands of Telco customers are living with negative listings on their credit file that just shouldn’t be there, and this should serve as a warning to all credit active individuals to check the accuracy of their own credit rating.

    Consumers need to know that mistakes do happen for a variety of reasons, and often it is not until people apply for credit in a separate instance that they find out – by then it is too late.

    An annual report released November last year by the Telecommunications Industry Ombudsman (TIO) reporting on the number and nature of consumer complaints in the 2010-11 year, revealed a staggering 18 per cent increase in complaints from the previous year.

    The TIO report attributes the rise in complaints to them to mobile phone service faults and increased smart phones use.

    “The record number of complaints made to the TIO is disappointing. Customers who have complained to us have been frustrated not only by mobile telephone problems, but also by deficient customer service and complaint handling,” Ombudsman Simon Cohen said.

    Daniel says trying to get the mistake fixed up and rebuild his credit file himself, was problematic.

    “I tried to clear it with Baycorp, they told me if I paid the debt they would reduce it to $6,000 – which I did. Unfortunately that didn’t clear my credit file, it was only marked as ‘paid’ and was no use to me getting a home loan,” he says.

    Many people have trouble resolving errors themselves, because they aren’t familiar with the legislation and find it difficult to negotiate with creditors.

    Customers can often be given the run-around by creditors, and can find it difficult to apply the letter of the law to their own circumstances when they have no knowledge of what the rules are. Sometimes that can do their case more harm than good.

    Daniel’s case has since been resolved, and MyCRA Credit Repairs have been successful in recovering the $6,000 he paid out to Baycorp.

    “We’re relieved to be finally getting a home, but the whole thing has left us very disappointed in big corporations – you really don’t get looked after,” he says.

    BRENT

    Another client, Brent from Western Australia had a contract with provider, ‘3’ in 2009 that went badly.

    About 3 months into his phone contract, Brent experienced numerous problems with his phone, sending it to be repaired 3 times before requesting a replacement. He posted the phone back to Sydney and received a new phone.

    A month later Brent’s phone was barred, and he received a phone call from 3 stating that he owed $1200 for the phone which 3 said was never returned.

    Brent spent a few months dealing with 3 trying to track down the phone in their warehouse and the postal system, before they eventually located it.

    It wasn’t until he applied for a loan and was turned away that he found out 3 had placed a default on his credit file anyway, despite an agreement to put a note on the account so that the outstanding amount for the missing phone did not get referred to a debt collector.

    MyCRA Credit Repairs fought for Brent to have the default removed from his credit file.

    It is so important for people to cover themselves when resolving bill and service disputes with Telcos or any creditor for that matter.

    People should never assume mistakes are rectified until they have confirmation in writing from the company. If you have a problem with a bill or service, take extensive notes and names and request confirmation of all decisions and outcomes in writing.

    If people are worried about what may have been reported about them on their credit report, they are entitled to obtain a copy of their credit file for free from the credit reporting agencies in Australia once every 12 months.

    The report is mailed to the credit file holder within 10 working days. If consumers find errors, or listings which they believe are inaccurate or unjust they have the right to have them removed.

    For help with rebuilding a credit history and repairing your bad credit rating contact MyCRA Credit Repairs tollfree on 1300 667 218 or visit the main website, www.mycra.com.au.

    Image: Stuart Miles / FreeDigitalPhotos.net

     

     

  • NCCP class action is passing the buck

    A class action against banks for irresponsible borrowing – seems unlikely when considering how hard it is for so many to get a home loan in this country – particularly for those people with a bad credit history.

    By GRAHAM DOESSEL CEO of MyCRA Credit Repairs and www.fixmybadcredit.com.au

    As discussed with Kevin Turner of Brisbane’s 4BC Real Estate Talk.

    Australian banks are being brought to answer under new NCCP legislation with a massive class action instigated by struggling borrowers, according to Broker News.

    The lawyers of 300,000 struggling bank customers are putting together a case alleging bank lending has put borrowers at risk. The case will be built around first home buyers and lower income households who have received loans since the onset of the financial crisis.

    It will allege that some of these borrowers are experiencing severe financial hardship through no fault of their own, through being allowed to enter a loan contract that they could not afford.

    The case is being spearheaded by retired international insurance broker Roger Brown, according to Fairfax Newspapers, who has been quoted as saying the way banks have been lending has been “irresponsible”.

    In my view, borrowers need to take responsibility for understanding the commitment they are entering. Anyone who signs a contract should not do that lightly – a loan is a serious commitment which stretches for longer than many first home buyers have been alive. Buyers need to be comfortable in it long term, allowing for future changes that no bank can calculate on.

    If people only just qualify for the mortgage with the first home buyer’s grant, and then they go and add further and further credit commitments to the mix, of course they are going to run into trouble. But how can that be the bank’s fault? The First home buyer’s grant is intended as government assistance, not as help to prop up people who would otherwise fail to qualify.

    In real terms our system makes it extremely difficult for people to get a home loan and heaven forbid them having a bad credit rating for not paying a bill on time.

    We help more and more clients with a bad credit rating every day. These people have saved for a deposit for years, only to have their dream of home ownership ripped out from under them because of something like a small Telco default.

    If the banks had in some way falsified information, then of course that would be irresponsible and deserving of a class action. But if these buyers have really just failed to fully understand their own responsibilities and the ramifications of late payments until it was too late, then I don’t believe that is grounds for suing the banks.

    What is needed is more education in general from governments and the industry, and that would be a great outcome for Australian borrowers in general.

    People need to understand credit from a young age, how it can work for them, what can go wrong and how much is too much. They need to be educated about their credit rating and how essential it is to keep a clear credit file.

    For more information on how a bad credit rating affects people’s lives, to order a free credit report or to learn how to fix a bad credit rating, visit our main website www.mycra.com.au or call us tollfree on 1300 667 218.