MyCRA Specialist Credit Repair Lawyers

Tag: defaults

  • Brokers and clients disadvantaged by clients navigating the ‘minefield’ of credit reporting

    Media Release

    Brokers and clients disadvantaged by clients navigating the ‘minefield’ of credit reporting alone

    Brokers who don’t have contact with a reputable credit rating repairer to refer bad credit clients to, may be missing out on valuable commission through lost deals, and in some cases may also be doing their clients a disservice, says a leading credit rating repairer and advocate for credit reporting accuracy.

    CEO of MyCRA Credit Rating Repairs, Graham Doessel says whilst many people whose credit history shows up with defaults have obtained that default justly, there are also many whose credit file contains errors and omissions and he says those people should be given the chance to clear their name.

    “I would like to say it is as easy as calling the Creditor to sort out the mix-up, but in reality clearing bad credit is a minefield, and a credit rating repairer can be invaluable,” Mr Doessel says.

    Generally when a client presents to a broker with bad credit they have two options:

    (1) Send them packing to resolve the mix-up or to wait until the credit listing “falls off” their credit file in 5 or 7 years before they apply again.

    (2) Organise a non-conforming loan at a higher interest rate to absorb the risk associated with lending to those with bad credit.

    When faced with a credit rating error, Mr Doessel says the clients who are sent away may not always be able to resolve their credit reporting dispute themselves.

    “Credit reporting is governed by mountains of legislation across different industries, so it is not always about right or wrong, but how the letter of the law applies in each case. We have seen many clients who are defaulted despite doing the right thing and despite working actively to try and resolve the situation themselves,” he says.

    He says many brokers put credit repair in the “too hard” basket and prefer to steer their clients to the non-conforming market – at least for the first few years of the loan when they can then refinance.

    “There are a couple of reasons why a non-conforming loan will not always be the best choice for the client. Firstly, they can lose thousands on interest even over the first three years, and secondly with the market the way it’s been more home owners are stuck, finding they can’t refinance due to lack of equity in the home,” he explains.

    Mr Doessel wants to help educate brokers and consumers alike on some of the myths surrounding credit files:

    1. Consumers always know they have bad credit before they apply for a loan.
    There can be many reasons for people not to know they have bad credit until they apply for a loan. They may have moved, been hospitalised, been an identity theft victim or even been a victim of error with their creditor. If the client was not notified prior to the default, in many instances the listing has been placed on the credit file unlawfully, and should be disputed.

    2. Credit file listings are always correctly placed on credit files.
    Credit reporting mistakes can and do happen –but most consumers are unable to recognise credit file errors. Some estimates point to as many as 34% of credit files containing errors or omissions. [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][i]

    Credit reporting agency Veda Advantage recently admitted about 1% of material errors detected by their system alone.[ii] But many more may go undetected by credit reporting agencies, creditors and consumers until it’s too late and the consumer is refused a home loan.

    3. Credit file complaints are easily disputed.
    Some brokers assume if the listing is there – the client must be deserving of it. But in reality, once a listing has been placed on a credit file, it is very difficult for individuals to have removed. So even if the listing shouldn’t be there, most often people are forced to put up with it. Often they are told the listing can be marked as paid, but will not be removed from the credit file.

    4. If a Default or Clear-out is on the credit file it can never be removed prior to the end date.
    Some brokers assume credit repair must be a ‘con’, as in their experience listings are never removed. In truth, unless the client can show why the listing was placed unlawfully on the credit file it will not be removed. It is up to the client (or the credit repairer acting on their behalf) to show reason as to why the listing was placed unlawfully, and negotiate its removal.

    The process of credit repair involves an audit-like investigation of the entire case to determine, based on legislation whether the credit listing was placed unlawfully on the credit file. If this is determined, the credit repairer will formally negotiate the removal of the listing from the credit file on the client’s behalf.

    5. A bad credit client should be steered to the non-conforming market.
    If a broker considers duty of care to their client, and they believe the client should be able to obtain mainstream credit, except for bad credit history – then another step must be inserted in the process – deciding on the possible validity of the bad credit before providing non-conforming finance options to them.

    “As a successful broker in the non-conforming market for many years, with many cases I was left scratching my head as to why these perfectly suitable clients who had nothing wrong bar their credit rating errors did not have other options than to enter a loan at sky-high interest rates just to break in to the property market. That is precisely why I founded a credit repair business in the first place,” Mr Doessel says.

    6. Credit repair is a waste of money.
    If a potential borrower is able to have their unfair credit listing removed, they can reduce their interest charges by thousands just by entering a loan with a mainstream lender.

    On a loan amount of $350,000, a borrower would pay $487.62 more in interest each month over the first three years in a non-conforming loan at 9% interest vs the standard variable rate of say 7%.

    When we look at that in total, the borrower would be up for a staggering $17,554.34 more just in interest alone over those first three years.

    7. All credit repairers are the same
    Consumers do need to be aware there are some agencies out there who are happy to take money, but don’t add enough benefit to be of value over what an individual could do themselves. People looking for a reputable credit repairer should ask plenty of questions, do their homework on the company, and request some testimonials from past clients before they commit.

    /ENDS.

    Please contact:

    Graham Doessel – Founder and CEO MyCRA PH 3124 7133

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

    http://www.mycra.com.au/ www.mycra.com.au.blog

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

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    [i] http://www.smh.com.au/articles/2004/02/09/1076175103983.html

    (2) http://au.news.yahoo.com/today-tonight/latest/article/-/10670080/credit-ratings-check/

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

  • The risks you’re taking with credit this Christmas that could see you left without a home

    Media Release

    The risks you’re taking with credit this Christmas that could see you left without a home

    A consumer advocate for accurate credit reporting warns Australians who use credit over the Christmas period they should be cautious about the ways their credit rating can be put at risk, which could see them refused finance in the New Year.

    CEO of MyCRA Credit Rating Repairs, Graham Doessel says after the highs of Christmas, the New Year can see people weighed down by credit stress, and the reason is not always due to overspending.

    “Many people throw things on credit at Christmas and think nothing of it, but we should be on guard for the ways this can potentially lead to credit stress and bad credit history in the following months.”

    “If you’re lumbered with a bad credit rating, you’re generally locked out of mainstream credit for a significant time – between 5 and 7 years. You can be refused a home loan, and most other credit for that matter – even mobile phone plans.” Mr Doessel says.

    He says people have an increased risk of damaging their credit rating during Christmas and covers 5 major ways this can occur:

    1. Identity theft.

    Identity theft and fraud has grown in severity and volume to now be the fastest growing crime in Australia.[fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][i]

    Scammers are out in full force at Christmas, people can be lax with their personal information and credit cards are used more frequently and at a variety of locations.

    Security company, McAfee’s recently released their warning ’12 scams of Christmas’ hoping to warn consumers about where cybercriminals may be looking to take advantage of consumers over the festive months. Scams warnings are given for fake vacations, fake gifts and e-cards, malicious mobile apps and a multitude of online dangers including bogus websites and phishing scams.[ii]

    “If fraudsters are able to get hold of your personal details they have the key to your good credit rating. They can run up credit all over town in your name. Often it’s not until you apply for credit in your own right and are refused that you realise your credit file has been misused – but by then it’s too late. Your life is basically set to be turned upside down,” Mr Doessel says.

    2. Overlooking bill payments.

    With the busy lead up to Christmas, some people can find they overlook repayment of basic accounts. Then if they go on vacation, it can easily escalate the overdue account into default status.

    “Overdue bills for as little as $100 can be just as damaging to your credit file as missing a mortgage repayment. Any credit account which is more than 60 days overdue can be listed by the Creditor and will show on your credit rating. Basically any negative listing will hinder your chances of getting credit in the future,” Mr Doessel says.

    3. Moving and transfers.

    “A change of address is a very common reason bills and warning notices go unnoticed and unpaid – and you can have a bad credit rating attached to you that you have no idea about until you apply for a home loan,” he says.

    As Christmas and New Year is a very common time for transfers and other work changes to occur that could see people moving interstate, people should tie up all loose ends at their current address, ensuring all changes of address and accounts are settled and confirmed in writing to avoid being blacklisted for credit.

    4. Over committing and spiralling into debt.

    Some people feel the pressure to give so much they do so at the expense of their own budget and ultimately end up with a debt they cannot pay back.

    The consequence of this can be getting into more debt to pay the original debt. People then end up with loan commitments they can’t meet or other bills get neglected because they just can’t afford to pay it all. Creditors start to close in and their credit file is damaged.

    5. Overlooking errors and omissions from Creditors.

    Creditors may also be affected by Christmas. The volume of transactions may increase while staff decrease, putting pressure on some Creditors’ systems.

    For this reason it is crucial for people to keep watch on their own finances.

    “Despite being a busy period for all families, it is important to check your bank statements and bills at this time. Creditors can and do make mistakes with billing. Also keep abreast of which bills are due and when. If you notice you haven’t received a bill and you believe it’s due, you should chase it up. No news is in this case not good news, and could mean you have an overdue account noted on your file,” he says.

    Christmas is also a good time for people to check their credit file. They can request a free copy of their credit file from one or more of the credit reporting agencies and a credit report will be sent within 10 working days.

    “If there are errors on your credit report, or it contains negative listings – defaults, writs or Judgments which are unfair or shouldn’t be there, then it is important to know you have the right to have them rectified or removed,” Mr Doessel says.

    Contact MyCRA Credit Rating Repairs for more information on credit rating repair on 1300 667 218.

    /ENDS.

    Please contact:

    Graham Doessel – Director Ph 3124 7133

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

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

    MyCRA Credit Repairs is Australia’s leading credit rating repairer. We permanently remove defaults from credit files.

    Image: sixninepixels/ www.FreeDigitalPhotos.net

     

     

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    [i] http://www.crimecommission.gov.au/publications/crime-profile-series-fact-sheet/identity-crime

    (2) https://blogs.mcafee.com/consumer/12-scams-of-christmas-2012[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

  • Parent equity loans skating on thin ice with credit rating

    Media Release

    Parent equity loans skating on thin ice with credit rating

    Predictions of a rise in parent equity loans following the pulling back of first home buyer’s grants in some states has a leading credit rating repairer worried about the possible impact on parental credit ratings in the crucial pre-retirement years.

    CEO of MyCRA Credit Repairs, Graham Doessel says a possible rise in parent equity loans is a dangerous trend. If the loan falls into arrears, parents would be liable, forcing them to work much longer than anticipated to pay off the debts that impact their own credit rating.

    “Many people go guarantor for their children, without assessing the risks to their own finances should the repayments not be met. If the child falls into arrears with payments, the parent is liable for any debt, and they are also blacklisted from credit accordingly,” Mr Doessel says.

    1300 Home Loans managing director, John Koldenda recently told Australian Broker he predicts a surge in popularity for the parent equity type of loan following the wind up of first home buyer subsidies in each State.

    “These loans have many benefits including allowing children to avoid expensive Lenders Mortgage Insurance that is paid by borrowers – often young people – with low equity,” he said.[fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][i]

    But Mr Doessel says whilst there are advantages for the child, if repayments are not made, the disadvantages stretch to both parties.

    “If the adult child fails to make repayments the parent is liable for this debt, if that extends past 60 days, the creditor can place a default on both credit files. In some cases parents are not aware repayments have stopped, and it’s not until they attempt to take out credit themselves and are refused that they realise there is a problem,” Mr Doessel says.

    He says a default of this nature on someone’s credit file can severely hinder chances of obtaining credit, and defaults remain on a person’s credit file for 5 years.

    “Worst case scenario, is the bank begins to use the property the guarantor put forward as collateral, to recover lost debts. There is a danger the guarantor can lose their home. Those people who were so close to financial freedom are now facing debt, and a shaky retirement,” he says.

    The Sydney Morning Herald Personal Loans Smart Guide[ii] provides some important questions for people to consider when making the decision whether or not to go guarantee a home loan:

    •How much is being borrowed?

    •How responsible is the borrower?

    •How stable is their employment?

    •Does the borrower have any other means of repaying the loan should he or she fall ill, be injured or become unemployed?

    •Can I afford to repay the total sum of the loan?
    “By far and away the most important question parents need to be asking is ‘could we make the repayments on this loan should our child be unable to?’ If there is any doubt of this, it may be best not to guarantee the loan,” Mr Doessel says.

    If people do decide they want to proceed with a parent equity loan, he recommends taking a few additional things into consideration before signing on the dotted line:

    1. Seek third party and or legal advice prior to any agreement being made.

    2. Insist there is adequate insurance to cover anything that may go wrong during the term of the loan, such as life insurance and income protection insurance.

    3. Set a specific amount that will be guaranteed

    4. Ensure there is an ending to the time period of the guarantee

    5. Request a copy of all bank statements during the course of the guarantee, so that parents are aware of any late payments. This way, payment problems can be addressed prior to any defaults, and while the parent’s good credit rating is still intact.

    /ENDS

    Please contact:

    Lisa Brewster – Media Relations 0450 554 007 media@mycra.com.au

    Graham Doessel – Director Ph 3124 7133

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

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

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    [i] http://www.brokernews.com.au/article/parents-to-step-in-as-fhb-boosts-end-129917.aspx

    [ii] http://www.smh.com.au/money/tools-and-guides/step-4-going-guarantor-20100529-wmcd.html

    Image: jannoon028/ www.FreeDigitalPhotos.net[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

  • It’s not credit for Christmas, says DnB

    Christmas credit may not be ‘on the cards’ for shoppers this year. Due to concern about financial security in Australia, it is predicted shoppers will continue to tighten their purse strings over the Christmas period, with less predicted to spend money on non-essential items and credit usage predicted to drop, according to credit reporting agency Dun & Bradstreet.

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

    Findings from Dun & Bradstreet’s latest Consumer Credit Expectations Survey, which measures expectations for savings, credit usage, spending and debt performance during the December quarter 2012, show half of Australia’s households are less likely to spend on non-essentials in the coming months.

    The survey showed:

    • One in three (29%) are more inclined to save than they were 12 months ago.
    • 56 per cent of Australians are concerned about their personal financial situation.
    • 37 per cent of households less likely to use a credit card to pay for non-essential items over Christmas compared to the same period last year, while just 16 per cent plan to apply for a new credit product or limit increase.

    Dun & Bradstreet notes that the Reserve Bank’s decision to lower interest rates due to slower economic growth comes as households reduce debt and increase savings as a buffer against economic instability, including the risk of rising unemployment. The bank is now predicting more moderate and sustainable credit growth off the back of this trend in consumer behaviour.

    Dun & Bradstreet General Manager, Danielle Woods, says the conservative consumer outlook could have a significant negative impact on businesses reliant on the Christmas rush.

    “An increasing number of Australians are concerned about their financial security and this is weighing heavily on their plans for the Christmas period,” Ms Woods said.

    “Prioritising saving over non-essential spending is a positive for the balance sheets of Australian households and the Reserve Bank is certainly encouraging this behaviour, in light of uncertain employment conditions. However, it could have detrimental flow on effects for businesses that are looking to Christmas to drive an uplift in sales.”

    However DnB also says, while consumers are planning to avoid non-essential spending and non-essential credit usage during the Christmas period, a significant proportion will need to rely on existing lines of credit to cover the cost of living.

    Forty per cent of 35-49 year olds will use credit to cover expenses they couldn’t otherwise afford, up from 35 per cent during the December quarter 2011. In addition, 60 per cent of this demographic are expressing concern over their financial situation and one in three (35%) would last no longer than one month on their current savings without full-time employment.

    This survey reveals a similar sentiment from Australian Bureau of Statistics figures released in September this year, showing one in seven Australian households is spending more than it earns, as the working poor struggle with monster mortgages and surging power bills.

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

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

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

    So it seems the trend is continuing that most people are batting down the hatches and reducing their spending in order to pay down debts – but there are sections of the community who are still struggling due to rising costs of living and over-commitment. This seems apparent regardless of income. So for those people, credit for Christmas may be a reality.

    Causes for over-commitment can be a simple inability to manage money – wanting more than they can afford. Or in some cases, over-commitment can be a gradual thing – sometimes caused by expensive credit as a result of bad credit history. There have been reports that possibly as many as 3,000,000 Australians are impacted by bad credit history.

    If someone lands with a bad credit rating, it can completely change their financial situation. The black marks placed there by creditors show up on the credit file for 5 years. Bad credit can limit choices and can perpetuate the debt cycle by leading people to choose loans with higher interest rates and more fees, so the struggle to make repayments can be even harder.

    If the person with bad credit history wants to try and start again with credit, it may be possible to wipe the slate clean  and remove bad credit history, particularly if it should not be there, or was incorrect in the first place.  If the credit file contains inconsistencies, that person may be a good candidate for credit repair.

    A credit repairer can work with creditors on behalf of the client to identify inconsistencies and negotiate to clear the credit file of those defaults, clear-outs, writs and Judgments which contain errors, are unjust or just should not be there. A clear credit rating would give them the financial freedom to use credit whenever they need to at competitive rates.

    For advice about credit repair contact a  Credit Repair Advisor on 1300 667 218 or visit MyCRA Credit Rating Repairs website www.mycra.com.au.

     

  • Bill Shock: telco bills ruining credit ratings

    Botched phone plans and lack of data usage monitoring is leaving many Australians shell shocked over their mobile bills, with bills so large many can’t pay up or refuse to pay up, leading to an increased rate of defaults. We look at what is happening with Telco consumers, the new laws that have come in to combat bill shock, and some practical things that you can do to prevent it happening to you, and threatening your good credit rating.

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

    A large number of current credit listing complaints we receive from telco consumers relate to data usage on mobile phones. Consumers are confused when it comes to data allowance on their smartphones, and the providers up till now, have not been helping.

    Often clients claim they have gone over their allowance really quickly, or the plan they were put on was not appropriate for what they intended to use their mobile internet for. Often they can have great difficulty in cancelling the accounts or coming to a resolution with telcos over these billing issues.

    Our current statistics show almost 26% of our credit repair clientele in the 12 months to July were telco customers.

    Consumers have either reluctantly paid the bill, thought the matter was settled, only to find they were defaulted anyway, or they have just refused to pay the bill until they got some resolution – but have copped a bad credit rating through the account being more than 60 days in arrears.

    Either way, they were dished out at least 5 years of bad credit from the episode unless they have been able to make a successful complaint.

    Complaints numbers

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

    The TIO reports new complaints about over-commitment caused by inadequate spend controls have over doubled in 12 months (4,282 in the January-March 2012 quarter, compared to 2,181 in the same quarter in 2011). In the same periods, new complaints about disputed internet charges increased 180 per cent (From 981 to 2,823).

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

    The powers that be have heard the many complaints. Some changes have been swiftly made to improve transparency and service for telco customers. A revised Telecommunications Consumer Protection Code has been made in conjunction with the Australian Communications and Media Authority (ACMA) which will amongst other things require telcos to provide their customers with notifications when they have used 80% and 100% of their data usage in the plan.

    These changes come after pressure from ACMA for Telcos to offer better protection for consumers, or face external regulation.

    For more information on the TCP Code, see our September post ‘Telco bill shock should in theory now be a thing of the past.’

    In the meantime, many consumers are still facing bill shock. We look at what you can do to prevent it.

    Preventing Bill Shock

    Savingguide.com.au published a great article late last week detailing some practical things that you can do to avoid bill shock. Here is an excerpt from ‘How to Avoid Bill Shock’:

    Read Your Contract

    I’ve said it before and somehow I feel I shall say it again: read the contract. From start to end. Before signing up to anything. Now, let’s just say you have already signed up and you didn’t read it before, you are not off the hook. Read it now. I’m serious, go do it… like, right now!

    Now that you’ve read your contract, you’ll know exactly how much data you get for your regular fee and how much you’re going to pay if you exceed that limit. Without this knowledge, you’re really just playing a guessing game and you’re probably going to lose.

    Don’t be Silly

    Seems obvious, doesn’t it? Yet here we are. If you are on a limited data allowance, don’t fritter it away on silly things! When I first got my smart phone I was so enamoured by the fact that I could get the internet on my handset that I would lie in bed, checking the week ahead’s weather on my mobile rather than simple make the walk to the study and use my PC, on which the internet is virtually limitless! Fortunately, I did not have to learn the hard way but many people will. Don’t be one of them.

    Start Downloading

    I know, I know, I just told you not to download stuff but this is the exception. Downloading the right apps is going to make all the difference, in fact these two apps are the best way to keep your data use under control.

    Data Usage Monitor

    A data usage monitor like 3G Watchdog (Android) is a brilliant addition to your phone. Simply enter the date your billing cycle commences and your data allowance, and a little symbol appears on your phone’s desktop, changing colour to warn you when you’re reaching your limit.

    Programme Closing

    A programme-closing app is your next best friend. Apps like Advanced Task Killer enable you to close any programmes that might be running without your knowledge with the push of a button. And without programmes secretly running, chewing into your data allowance, you’re much less likely to suffer that dreaded disease, bill shock.

    This is great advice. But what about if you already have a phone bill that has left your head spinning?

    How to Dispute That Shocking Mobile Bill

    1. Attempt to resolve the dispute with the Telco first. If a bill has just popped up you don’t agree with, let your Provider know, and DOCUMENT ALL CORRESPONDENCE WITH THEM (and document who you speak with if you are calling).

    2. You may need to make a formal complaint in writing. If there is no resolution over the telephone, set out what specific resolution you require, and all the details of your complaint. The telco has 30 days to answer any written complaint you make.

    2. Get all responses in writing. The matter may seem at an end, but sometimes people believe they have sorted it out only to find out later they have been defaulted anyway. If you have come to a resolution with the telco verbally, get it in writing and make sure it clearly states what will happen from here.

    3. If the matter can’t be resolved to your satisfaction internally, take your case to the Telecommunications Industry Ombudsman. The TIO will make a decision on the matter, and their decision will be final. Make sure you provide as much evidence as you can for the Ombudsman to make an informed decision – you may only get one shot at it.

    4. If at any stage you have a credit file listing from a Telco which you believe shouldn’t be there, you can undertake professional credit repair services. The credit repairer works on the consumer’s behalf to remove credit file listings which contain errors or inconsistencies or just out and out shouldn’t be there. It gives the consumer the best chance of presenting the best case for removal of a disputed listing, and actually having an unfair listing removed completely off your credit file. The credit repairer can also escalate the matter to the TIO on the client’s behalf if necessary.

    If you would like help disputing your telco default or other credit listing, contact a Credit Repair Advisor on 1300 667 218 or visit our main website for more information MyCRA Credit Rating Repairs www.mycra.com.au.

    Image: Ambro/ www.FreeDigitalPhotos.net

     

  • New Credit Laws Pass House of Representatives

    Australia’s new Privacy Laws, which include a credit reporting law overhaul are coming to fruition. Amendments to the Privacy Act 1988 passed through the House of Representatives yesterday. What will this mean for you, your credit file and will it make it easier to remove bad credit?

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

    The Attorney-General announced late yesterday that the House of Representatives had passed reforms to the Privacy Act 1988. The Privacy Amendment (Enhancing Privacy Protection) Bill 2012 – which includes major amendments to Australia’s credit reporting laws –will now be introduced in the Senate where it is currently being considered by the Senate Legal and Constitutional Affairs Legislation Committee. The Government may make further amendments in the Senate in response to the Senate Legal and Constitutional Committee’s report, which is due to report shortly.

    “The House Committee has found that the reforms should be passed in their current form and the Government has moved quickly to implement those wishes,” Attorney-General Nicola Roxon said in a statement to the media yesterday.

    Ms Roxon says the reforms will focus on giving power back to consumers over how organisations use their personal information. The power will be extended to consumers in the area of credit reporting.

    “These changes will also provide much more power to consumers to be able to access and, if necessary, correct their credit reports,” Ms Roxon said.

    Through the reforms the powers of the Privacy Commissioner’s will also be enhanced to improve the Commissioner’s ability to resolve complaints, conduct investigations and promote privacy compliance. For example, the Commissioner will also be able to apply to the court for a civil penalty order against organisations for credit reporting breaches. Penalties for an individual range $2,200 to $220,000 and for a company they range from $110,000 to $1.1 million.

    We welcome the changes in the area of credit file correction. The new laws will most importantly enable consumers to force their Creditor to justify a disputed listing; and give consequences for credit reporting breaches. This is important in correcting credit listing complaints.

    Whilst the changes should make a positive difference in ease of correction, what can make or break a credit listing complaint – is the individual’s knowledge of credit reporting law. In order to make a successful complaint to justify removing a credit listing, the individual must show that the Creditor has unlawfully listed it. The complainant must also be able to give evidence to show how that occurred, which means providing supporting documentation from the Creditor– which can also be difficult for the individual to obtain. Then there’s marrying the two together. Then, there’s negotiating with the Creditor.

    All of these aspects of disputing a credit listing could still see a valid complaint come unstuck if not performed correctly.

    In addition to this, there are a myriad of reasons why a credit listing may be unlawful which are not immediately evident by the individual. Creditors can and do make mistakes with credit reporting. They don’t give the right notification to the consumer; they don’t give them adequate time to remedy the arrears; they don’t update contact details for the client; they don’t get the account right in the first place.

    So it will still give you the best chance of having a disputed credit listing fall in your favour if you open your options, solidify your case, and have the matter handled by a professional credit repairer. But it will be important to choose the right kind of credit repair and make sure you’re looked after each step of the way. Visit our main site for more details www.mycra.com.au or contact a Credit Repair Advisor on 1300 667 218.

    Image: Salvatore Vuono/ www.FreeDigitalPhotos.net

  • Debt Struggles Plague Queenslanders and threaten their credit history

    Queensland is according to those in the know, still experiencing the economic implications of disaster following the recent floods. Ratings agency Fitch has released its latest study which still shows the State as the worst-performing in the nation. We look at why this may be occuring, and the ramifications of mortgage delinqency for the credit file.

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

    A mortgage ‘delinquency’ – is classified as such when a borrower is at least 30 days behind in repayments. According to Fitch, Queensland has more delinquencies than any other state in Australia.

    According to The Australian yesterday, Queensland has six out of the 10 worst-performing regions in the nation led by Ipswich, Gold Coast east and west, Logan City, Caboolture Shire and the Sunshine Coast, which has experienced major property market “volatility”.

    It also reports Queensland has the highest rate of 90-day delinquency in the country (mortgages about to default) – that rate is 0.78 per cent vastly more than the national average of 0.63 per cent.

    Fitch analyst James Zanesi said the Reserve Bank’s interest rate cuts in May and June would help ease the mortgage stress but the benefits were yet to be felt by home owners.

    Fitch estimates there is a four-month lag between rates being cut and troubled mortgages starting to improve.

    Mr Zanesi said the unemployment rate was one of the most important factors in directing the future of the property market and mortgage stress. The Fitch report showed the Western Australian market was performing well, with the state’s delinquency rate below the national average.

    According to a story Borrowers Struggling in tourism areas in the Brisbane Times, the large proportion of Queensland arrears also has to do with investment and tourism in sea-side suburbs along the east coast.

    Here is an excerpt from that story:

    RP Data research director Tim Lawless said the biggest falls in the ”lifestyle” market had occurred in Queensland and NSW.

    Prices of units in Cairns have fallen 22.2 per cent from their peak, while units on Victoria’s Surf Coast have lost 6.8 per cent.

    ”All these markets really have quite a similar performance in the sense that we’ve seen some material declines in values,” Mr Lawless said.

    The ongoing sharemarket slump has also choked off housing demand from some Australian retirees, many of whom have deferred plans to retire on the coast, he said.

    ”All those people that were aspiring to put their feet up at the Gold Coast and retire, a lot of them are rethinking because they’ve seen a halving of their share portfolio and their retirement savings aren’t what they used to be,” Mr Lawless said.

    The ongoing weakness in beachside regions suggests the poor performance of regional tourism is hurting the value of holiday home investments.

    On the Gold Coast, for instance, Fitch analyst James Zanesi said many of the borrowers who were falling behind on their repayments were investors, rather than owner-occupiers.

    ”When house prices are going down you might have a borrower who is trying to hold onto a home because they don’t want to make a loss.”

    For investors – a housing market slump can significantly hurt their chances of staying in the clear with their credit file. But it often comes down to decision making.

    When property prices go down and buyers are scarce, many struggle with repayments. Add perhaps a little drop in employment in an area meaning perhaps rental rates come down when more people choose to live where the work is, and you have a property worth less, with no tenant or rental returns less than than forecasted. Many investors feel they are in a no-win situation – so they figure the best thing to do is wait and cross their fingers for improvement.

    But just as I advise families struggling to make repayments on their residential home – burying your head in the sand about debts is never the safest option.
    Anyone whose mortgage has gone into arrears has a serious problem if they can’t make the repayments. They have to look the situation square in the face – without pride getting in the way and make some tough decisions on what to do next.

    For investors, it might mean cutting their losses and selling for less – yes less than what they purchased the home for. If the alternative is to suffer bad credit from mortgage arrears – then it can often be the kindest option. When the opportunity arises they can easily re-enter the property investment market without any credit blemishes. If they wait around for the bank to take the home, not only will there be defaults against their name, but there could also be a bigger debt from the bank once costs are incurred.

    For those families struggling to pay the mortgage on their residential home, it is a similar issue. If the reason for arrears is simply due to unemployment or illness, the family needs to contact their lender and attempt to work out a variation on their repayments – preferably prior to any arrears – and certainly prior to a default. See more on how to apply for a financial hardship variation with your lender.

    If the problem gets bigger, less temporary, then the best thing for them could be to sell. It is certainly preferential to going Bankrupt and having their credit history scarred for life. It is also better than facing 5 to 7 years without access to credit through having a default or similar listing noted on their credit rating.

    Defaults – which are noted after a repayment is more than 60days in arrears effectively destroy a person’s credit rating for 5 years. They are not only refused a home loan, but most mainstream credit including mobile phone plans. It’s pretty serious.

    Anyone who is finding it hard to meet mortgage repayments should contact creditors and attempt to work out a payment plan.

    Most banks want to work with people to help them out of a rough patch. But if they fail to contact, and fail to pay, they will be defaulted.

    Image: Kittikun Atsawintarangkul/ www.FreeDigitalPhotos.net

    Image 2: jscreationzs/ www.FreeDigitalPhotos.net

  • Credit Repair Guide – Consumer Advocate Graham Doessel Answers Your Questions About Fixing Bad Credit

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    Credit Repair is still a relatively unknown profession outside of the finance industry.

    It is often not until a person is refused a loan due to adverse listings on their credit file that they begin to look for avenues to fix what is being said about them on their credit report – especially if they believe they have an incorrect credit report.

    Research on the subject can produce some contradictory advice, so we thought we would clarify the basics of credit restoration or credit repair as an industry in Australia, and explain the instances in which it will be the best solution for those people who are refused mainstream credit due to defaults, Writs or Judgments on their credit file.

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

    As Credit Repair Lawyers, we find clients are often unaware of just what is involved with repairing their credit rating. Most times they don’t even know what’s on their credit rating until they apply for a loan and are refused – let alone know what to do to fix it. And even those savvy clients who have done a bit of homework and attempted to correct a wrong credit listing by themselves can get brick-walled by their Creditor, told that the listing can only be marked as paid but will not be removed. So often their broker will suggest professional a credit repair law firm to them, or they may have found us on an internet search.

    Here are some of the main questions we get asked by our new credit repair clients – we hope they help you too if you want to know more about what credit repair is all about.

    What is professional credit repair?

    Professional credit repair involves a credit repair law firm working on your behalf to remove inconsistencies or errors which are found on your credit file, in order to give you the best chance of obtaining credit with the lender of your choice.

    How have professional credit repairers come about?

    The Credit Repair Industry in Australia has grown significantly over a short period of a couple of years. There are many reasons for this.

    • One is due to the tightening of bank lending criteria following the Global Financial Crisis (GFC) and then the Banking Royal Commission.
    • The decline in sub-prime lenders has meant that many non-conforming loans that were previously available to many people have since folded.

    Put simply, credit repair has grown from the need for potentially millions of credit file holders with black marks on their credit report to find some way to buy a home, a car, get a credit card and even a mobile phone plan.

    Because of tight lending criteria, the need for greater accuracy in credit reporting has arisen.

    When deciding whether to lend someone money, banks are looking at any reason people may default on a potential loan – which includes any suspect credit history.

    The mistakes creditors make every day in reporting negative listings may have previously gone unnoticed, but since the GFC, the royal commission and now Covid, they can be the very reason many people are refused credit.

    So with many instances of credit reporting ‘inconsistencies’, coupled with very little consumer knowledge on credit reporting law and a great need for a third-party negotiator when dealing with creditors, the credit repair industry has been driven forward.

    What are credit rating errors?

    Credit rating errors are quite common, and the onus of ensuring the accuracy of your credit file rests with you.

    But how do you know if a listing has been placed accurately on your credit file, or if it should be there in the first place?

    A credit repair lawyer with their knowledge of credit reporting legislation will find and address those instances where a credit listing may have been placed unlawfully on your credit file.

    Credit rating errors could be anything from

    • the listing placed on the wrong credit file; to
    • the basis of the credit listing being unfounded; to
    • incorrect notices being provided to the client; right through to
    • system errors and incorrect spelling, to name a few examples.

    Is credit repair legal?

    Yes. Credit repair lawyers work to ensure accurate and legal credit reporting.

    Creditors are bound by a large volume of legislation and codes of conduct to do with placing information on consumer credit files.

    These laws are in place to protect consumers from unfair and damaging credit reporting.

    What a credit repair lawyer does is investigate the procedures taken by the creditor when placing the listing on the credit file, and if necessary, alert creditors and other relevant authorities to the instances where they believe the listing was placed on the credit file unlawfully and for this reason request the listing’s removal from the client’s credit file.

    “If the listing has been placed unlawfully on the credit file, then it should not be there and should be removed.”

    What’s the process to fix my bad credit?

    Credit repair law is not an exact science, because every case is different but there are some common threads which run through credit reporting law which we follow.

    1. Firstly, we order a copy of your credit files on your behalf from one or more of Australia’s credit reporting bodies which tells us exactly who and what we are dealing with in relation to your bad credit.
    2. Then we investigate any avenues for disputing your credit listing or listings with your creditor.
      1. This involves requesting documentation from your creditor about your account, and
      2. cross referencing the procedures taken prior to and during the listing of the default, writ or Judgment with our knowledge of credit reporting legislation.
      3. This can be a lengthy process of review, and likewise, the creditor can at times take a while to provide the information they should.
    3. After we have all of the information, and reviewed it all against the legislation, we have the basis for a case for default, writ or Judgment removal.
    4. Then we formally communicate with your creditor to request the removal of what we would then deem to be a listing placed on your credit file unlawfully.

    This process can be a bit ‘back –and- forth’, as there are procedures that we, and they have to follow in accordance with industry and the law as well as negotiations which take place behind the scenes with creditors.

    The complaint may also need to be escalated to a higher authority such as an industry Ombudsman if there is no satisfaction with the creditor.

    If the creditor agrees to remove the listing, you will need to contact the credit reporting body to confirm it has been removed.

    The reason for this is that you do not create a credit ‘enquiry’ on your credit file by requesting information about your own credit report.

    If you want the best chance of obtaining credit, then you want to reduce the number of credit enquiries as much as possible.

    How long will it take to fix my bad credit?

    The length of time it will take to remove bad credit from your credit file is very much an unknown factor.

    It could depend on the particular facts relating to your application, including the evidence required to support each party’s claims; on the amount of cooperation we receive from your creditor/s including how quickly they respond to our requests; on the number of issues raised in your application; the volume and relevance of information and supporting documents provided by you and the complexity of the legislation relating to your particular defaults.

    We have had a previous success rate of up to 91.6% of removal on every case we take on, and this is on average taking 45 – 60 days (but as little as a couple of weeks) to achieve once we have deemed you suitable for credit repair.

    If my credit file shows an outstanding amount, should I pay it off?

    It depends on the nature of your credit listing dispute. We have in the past negotiated for the removal of many credit listings which still hold an outstanding amount. Your credit repair lawyer can give you further advice based on your individual case. This is why at MyCRA, the costs involved are not based on the amount owing but are on a per-listing basis. For more information on MyCRA Lawyers costs, visit our main website.

    If you have more questions about credit repair, contact our team on 1300 667 218 or visit the main website www.mycralawyers.com.au.

    Images: Stuart Miles/ www.FreeDigitalPhotos.net

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  • Have you checked your credit rating lately? Why the end of financial year is a good time to do it

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    Your credit file is one of those things that you often neglect until you need it.

    Heck, many people don’t even know they have a credit file, let alone the implications if they should end up with a default listing on their credit file. We explore the importance of knowing what people say about you on your credit file, how to check your credit rating, and why the end of financial year is a great time to make sure your credit file health is a-o-k.

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

    As the saying goes….there are two certainties in this world – death and taxes. But there is another certainty in Australia. If you have ever taken out or applied for credit, you will have a ‘credit file’ in your name. What does your credit file say about you?

    Your credit file contains a history of your credit applications, default listings and other information from the last (up to) 7 years, and is collated by the major credit reporting agencies if you have been credit-active in the past 5 to 7 years.  If you’ve applied for finance, or an account for services you are considered credit active and Creditors will have created or added to an existing file with one or more of the credit reporting bodies. Account types include mobile phone plans, accounts with utility companies, credit cards and finance or loans of any kind.

    Why should I know what’s on my credit file?

    Every creditor collects information about your credit activity and that information is supplied to one or more of the credit reporting agencies in Australia when required. When a lender is considering your credit application they will check your credit file to assess your suitability to service a loan or credit account.

    Your credit file contains information about credit and repayment of credit history, including any applications for credit and various details relating to your repayment history, for instance mortgages, personal loans and credit cards – and the way you conducted those accounts. It also contains any overdue credit accounts – these may be reported as a ‘payment default’, ‘clear-out’, an overdue account, late payment or in some cases may have gone all the way to a court Writ or court Judgment.

    Whilst there are legislative processes which must be followed when Creditors enter items on your credit file, it is up to us as the consumer to check that this has been done accurately. You may not know about a listing on your credit file, particularly if you have moved. In addition to this, mistakes can and do happen – even if you believe you have always made payments on time.

    A default or Clear-out will generally see you refused most types of mainstream credit for the term of the listing which can be 5-7 years – so it is important to know you have the all clear on your credit file, and if you don’t, you have time to fix any issues prior to applying for credit of any kind.

    How do I check my credit rating?

    If you are like many Australians you may be unaware of how the system works, and what your rights are in credit reporting so you probably haven’t checked your credit file before now.

    You can apply for a copy of your credit file for free every year from Australia’s credit reporting agencies, Equifax (Formerly Veda Advantage), Dun & Bradstreet, and Tasmanian Collection Services (if in Tasmania). A copy will be sent within 10 working days. Or you can pay a little extra for an urgent report.

    If your report comes back with errors, or you feel a listing is unjust or shouldn’t be there, you do have the right to have incorrect information rectified.

    Why is the end of financial year the best time to check my credit rating?

    End of financial year is a great time to order a copy of your credit file because after you have sat down to do your tax each year your records tend to be in order. This way, if there are any items you wish to cross-check on your credit file, you will have all the necessary information at your fingertips.

    What happens if my credit rating is not correct?

    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. Secondly, negotiating anything on your own behalf can be tricky.

    You may have a better chance of bad credit removal if you hire the services of a credit repair lawyer. 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.

    To find out more about repairing bad credit, contact MyCRA Lawyers & Credit Rating Repairs on 1300 667 218 or visit the main website www.mycralawyers.com.au.

    Image: nuchylee/ www.FreeDigitalPhotos.net

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  • Telco consumer code on third rewrite for June deadline

    A third shot at a telecommunications consumer code has recently been submitted by Telcos to the Australian Communications and Media Authority (ACMA). The Code submission is an attempt to self-regulate a heavily criticised industry and prevent Government intervention by the end of June deadline.  The Code is intended as a resolution to an 18-month investigation by the ACMA into telco customer complaints. As Telco disputes make up a heavy part of credit rating errors to date, we have been watching the outcome of this situation and how it could impact the consumer’s ability to resolve disputes, and prevent credit file errors and default listings which should not be there.

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

    IT News recently reported on developments of the Telecommunications Consumer Protection (TCP) Code in its article ACMA Sets June Deadline for Consumer Code.

    It reports that the ACMA has committed to deciding on whether to accept or reject a revised telco industry code on customer service and advertising by the end of the month, in preparation for registration and implementation by August 1.

    “We indicated that the previous ones that they had lodged with us wouldn’t secure registration,” ACMA chairman Chris Chapman told iTnews.

    Here is an excerpt from that story:

    It is understood the watchdog has already held meetings to discuss the May revision of the code, the largest revision of which included the concession for telcos to print unit pricing for SMS messages, phone calls and data blocks on outdoor advertising and flyers.

    It has previously opposed the move as unnecessary, despite attacks by consumer representative group ACCAN.

    Chapman threatened in April to directly regulate the industry if it ultimately declined to register the code, even on minor grounds.

    At the time, Chapman said the March revision of the code would be the final one for consideration. But ongoing discussions with industry led to one more version of the document ultimately being considered…

    It was initially submitted to the ACMA for registration in February but has since undergone two revisions as the ACMA declined to register the revised code over concerns it did not meet all recommendations laid out by the inquiry.

    “We absolutely believe that this code is complete, that it meets not just the requirements of the [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][Reconnecting the Customer] enquiry, it also meets the test of being the best and most sensible code we can put in place to enhance consumer protections and provide a win-win for consumers and the industry,” Communications Alliance chief executive John Stanton told iTnews.

     

    The ACMA  formally invited the industry to incorporate the following changes to its Telecommunications Consumer Protection (TCP) Code in its report Reconnecting the Customer:

    1.Clearer pricing information in advertisements allowing consumers to more easily compare services.
    2.Improved and more consistent pre-sale information about plans.
    3.Developing meaningful performance metrics which allow consumers to compare providers.
    4.Tools for consumers to monitor usage and expenditure.
    5.Better complaints-handling by providers.

    A shake up in the Telco industry is long overdue. Australians have been caught out time and again with botched bills and unresolved disputes with their Telco providers and their credit files have been damaged as a result.

    The Telecommunications Industry Ombudsman (TIO) revealed its findings on the extent of discontent within the industry in a survey of more than 500 Telco customers who had lodged complaints between July and August 2010.

    The TIO survey revealed more than half of consumers reported contact with their service providers five or more times before ringing the TIO. It also revealed most consumers reported spending three hours or more unsuccessfully trying to solve their complaint, with one in 5 saying they spent more than nine hours.

    “Consumers who come to the TIO report spending substantial time and effort solving their complaints,” said Ombudsman Simon Cohen.

    “They report being transferred from department to department, not being transferred to supervisors and, perhaps most frustratingly, getting no solution or a broken promise for their efforts. They are – by any measure – resilient consumers.”

    When disputing bills with the Telco industry, many people are unfairly penalised with a bad credit rating when the matter could have been dealt with better by the Telco in the first place. There is a great number of Telco credit file listings which contain errors, or have been put there unjustly or unfairly. Under current legislation, people do have the right to have credit file discrepancies resolved. But unfortunately it can be difficult for customers if they are not aware of the appropriate legislation and don’t have time to negotiate with creditors.

    MyCRA sends out complaints regularly to the TIO requesting investigations into errors that have found their way onto customer credit files.

    Hopefully these changes will result in less confusion and complaints in general amongst Telco customers and fewer people who have their good name destroyed unnecessarily due to credit file defaults which should not be there.

    For help with removing credit rating errors from credit files, contact MyCRA Credit Rating Repairs on 1300 667 218 or visit the main website www.mycra.com.au.

    Image: David Castillo Dominici/ www.FreeDigitalPhotos.net[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

  • More Australians under financial pressure and less to use credit for luxuries says D&B

    Despite a 20-year high in household savings, Dun & Bradstreet’s latest Consumer Credit Expectations Survey reveals more Australians are worried about their financial futures. Those that can are tightening their belts by saving and not spending. But significant portions of the community who are unable to do so, are reaching crisis point. Could we see the rate of defaults rise among these groups as people struggle to keep their heads above water?

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

    Credit reporting agency Dun & Bradstreet’s (D & B) Consumer Credit Expectations Survey September 2012 was released a couple of days ago. D & B conduct a national survey each quarter on expectations for savings, credit usage, spending and debt.

    The latest survey shows a lack of personal savings has six in ten Australians concerned about their current financial situation, with one in three indicating they would be unable to cover basic expenses for longer than a few weeks if faced with a sudden job loss.

    The report seems to show that those that can save are, and those that can’t are reaching crisis point. Likewise with credit – those that are in a stable financial situation are skimping on credit for luxuries, whilst the numbers of low income earners relying on credit just to get by are significant amongst low income households.

    Let’s look at the figures from the survey as they relate to 3 Australian expectations on household savings and stability, credit access and ability to meet credit commitments for this coming September quarter:

    Household Savings and Stability

    The survey found that a third of low-income earners and a quarter of older Australians would only be able to survive for up to one month without a steady income.

    Sixty-nine per cent of those earning less than $50,000 annually and 62 per cent of consumers aged 50-64 are worried about their personal financial health.

    In addition, one in four low-income households and one in five older Australians admit to having no savings, despite a substantial portion (close to one third) indicating that current economic conditions are refocusing their attention towards saving.

    According to Dun & Bradstreet Director, Adam Siddique, some vulnerable demographics are facing significant financial pressures.

    “Our latest research clearly demonstrates that consumers are worried about their financial position.

    “This is partly symptomatic of lingering pessimism from the global financial crisis however, for certain demographics it reflects the reality that households are living hand-to-mouth; with very little savings buffer should unforeseen circumstances occur. So while national household savings levels are at a 20-year high, it is clear that not all consumers are in a position to put money aside,” said Mr Siddique.

    “For the older demographic, concern over finances in part reflects the ongoing fallout from the global financial crisis and its impact on superannuation.”

    Projections for credit access

    More than half of all consumers (53%) will be less likely to spend money on entertainment or other non-essentials this year than 12 months ago.

    Likewise, 40 per cent of consumers are less inclined to use existing credit to buy non-essential items, a figure which rises to 48 per cent for low-income households.

    Expectations for new credit access has also fallen, down five percentage points to just 15 per cent since the March quarter.

    “Ten to 15 years ago consumers were more comfortable living with a lower savings to debt ratio. However, continued global economic uncertainty is weighing on Australian households and dissuading discretionary spending, credit usage and significant investments such as buying a property,” said Mr Siddique.

    Ability to Meet Credit commitments

    40 per cent of low-income households expect to rely on existing credit sources to cover costs – the same demographic also anticipates difficulty meeting current credit commitments.

    Whilst this figure is still too high, the number has actually reduced from expectations in the June quarter, which found nearly half (46%) of all low-income households expect difficulty managing their debt.

    Low-income earners are similarly expecting rising debt levels; 34 per cent compared with 24 per cent of middle-income earners.

    Amongst older Australians, 28 per cent of 50-64 year-olds expect they will need to rely on credit to cover expenses, while 41 per cent anticipate difficulty meeting existing credit obligations.

    Reliance on credit among older Australians comes as one third of consumers aged 50-64 anticipate rising household debt in the coming months, up from 26 per cent during the March quarter.

    The evidence showing older Australians experience difficulty with credit was echoed by Veda Advantage recently. We blogged about seniors (over 65’s) struggling with credit in our post Default rates soar in over 65’s. Veda’s study on generational trends for credit activity showed this age group have become more reliant on credit which has led to the increased level of defaults as some struggle to meet financial obligations.

    Solutions to financial concerns

    If people bury their heads in the sand about their finances, they can invariably end up with debt and with bad credit history.

    This bad credit can send them into a debt spiral for years to come. Bad credit sticks for 5 to 7 years, so people are banned from mainstream credit at normal interest rates and are forced into payday loans, fringe credit and the non-conforming market, all of which charge significantly higher interest rates for the increased ‘risk’ of lending to someone with a history of poor repayment.

    Rather than allow this to happen, people should put their hands up early, as there are many avenues for help out there today.

    ASIC’s Money Smart website is the best place to start to get some FREE tips on how to make the most of money, get out of debt or squirrel away for a rainy day.

    They also link to a list of free or low-cost financial counsellors who can actively help with budgeting, managing debt and financial difficulties.

    For people who are having trouble with repayments, aside from seeking financial counselling, TALK TO THE CREDITOR.

    Creditors are generally willing to assist people experiencing genuine financial hardship, but they need to be specifically informed of the financial hardship prior to bills going overdue or to default stage.

    ASIC has also put together a factsheet titled Can’t Pay Your Debts? which outlines the process of requesting financial hardship from your Creditor, and other financial solutions.

    People should act as early as possible on financial problems, and look for ways of realigning finances so they avoid defaulting on any payments.

    For those people who may not be struggling with their finances, but are in the 6 out of 10 Australians who are concerned about their current financial situation and want to get savvy with their money – Money Smart can also help, or perhaps Australian savings websites such as http://www.savingsguide.com.au or http://www.simplesavings.com.au/ can offer some motivation and encouragement.

    Image: Nutdanai Apikhomboonwaroot: www.FreeDigitalPhotos.net

    Image: digitalart: www.FreeDigitalPhotos.net

    For help with repairing bad credit history that is affecting your financial future, contact MyCRA Credit Rating Repairs for assessment of suitability for credit repair.

  • Beware banks last-ditch attempts to raise credit limits

    As of July 1, the Government has banned unsolicited offers to raise people’s credit limits. So no longer will people receive offers in the mail from their bank or finance company to increase the limit on their credit card or other lines of credit. This change is part of the Government’s move to ‘responsible lending’, which also encompasses a whole host of new credit and credit reporting laws. But reports are out that some lenders are attempting to offset the deadline with a host of offers that people should be wary of. Before July 1, people need to remember their own limits when it comes to finance, to avoid debt and inevitably, bad credit history.

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

    Recently the ABC’s 7:30 Report featured a story titled Credit card changes bring borrower warning. It interviewed industry spokespeople including Australian Securities and Investments Commission’s (ASIC) Peter Kell:

    “Unfortunately ASIC has seen some of the major lenders, some of the major banks, in fact, looking at the opportunity of the introduction of these new laws to push credit onto their customer base in a way that’s inappropriate, and in a way that arguably undermines the intent of the new laws,” Mr Kell says.

    “The Commonwealth Bank recently posted a notice on their website telling customers they would “lose the chance to get credit limit offers under the new laws, and miss out on the opportunity to access extra funds,” ABC’s Stephen Long reports.

    “CBA gave a court-enforceable undertaking to stop the deception, but the damage was done,” Long says. He reports there were around 100,000 responses to the advertisement.

    The Australian Bankers Association’s Steven Munchenberg has defended the actions of the CBA as more a ‘different interpretation’ of new legislation than an attempt to head off the new laws :

    “Look, we are very, very closely regulated industry, and ASIC is doing its job by monitoring very carefully what the banks do. There are times where the banks and ASIC will interpret legislation differently, and these are new laws. What we are learning is the approach that ASIC is going to take, and the banks will be very quick to make sure they’re compliant with ASIC’s approach,” Munchenberg says.

    So in other words, the banks will see what they can get away with, until ASIC raps them over the knuckles for it.

    In the meantime, there are people who as Consumer Action Law Centre’s Catriona Lowe says, assume because the bank has offered them extra credit they must have been assessed as being suitable to make the repayments.

    “We have seen and done research about the way in which these offers have been put together, which really encouraged people to turn off, if you like, that hard-nosed financial part of their brain, and turn on the fuzzy, “Oh yes, I deserve it, I might need it for a rainy day, the bank manager’s telling me it’s OK, I’ll just do it without thinking about it too much,” Ms Lowe says.

    The ABC also reports that both Ms Lowe and Financial Counsellor Gary Rothman have seen a huge surge in offers of additional credit ahead of the start of the new responsible lending laws next month.

    “It’s not uncommon for us to see people with $70,000 to 120,000 in credit card debt,” Mr Rothman says.

    This report took me back to a blog post from a while back, on the notion of Affluenza. The post, titled Caught Affluenza? How it can affect your credit rating health explores the rampant notion of MORE. That we need more money, more things, and often more than we really afford.

    This social disease was coined by Clive Hamilton and Richard Deniss in their book Affluenza: When Too Much Is Never Enough.

    “Affluenza pulls no punches, claiming our whole society is addicted to overconsumption. It tracks how much Australians overwork, the growing mountains of stuff we throw out, the drugs we take to ‘self-medicate’ and the real meaning of ‘choice’. Fortunately there is a cure. More and more Australians are deciding to ignore the advertisers, reduce their consumer spending and recapture their time for the things that really matter.”

    Basically the philosophy is we shouldn’t spend money we don’t have, on things we don’t need, and ultimately find ourselves with what we don’t want – debt, unhappiness and bad credit history.

    Don’t get me wrong – I don’t advocate total credit shut-down. It isn’t very practical. Credit is necessary in today’s society. But people should use it to enhance their lives so that they can spend time with the ones they love, or to really improve their quality of life. Essentially people should make credit work for them.

    I see different types of people seeking credit repair. I see many people who are perfectly capable of repaying credit, but are banned from obtaining it due to errors and inconsistencies from Creditors which lead to negative listings on their credit file. We do our darndest to help remove those from their credit reports and let people have that financial freedom back again.

    But I do see a few people who have caught ‘Affluenza’, who maybe should learn the the doctrine of ‘enough’ through being banned from credit for a while.  In the same token, those people need society’s support. They need laws like the ones coming through on July 1 to curb that susceptibility to offers of more, BEFORE they end up with bad credit history. They need the Creditors – so quick to issue more, and then so quick to issue defaults reined in and checked.

    That consumer shift to spending reduction and savings should be embraced by banks. New laws which seek to follow and help this psychic shift in society should not have been exploited by our banks or other Creditors in the last weeks prior to their introduction.

    A bad credit rating can completely change our financial situation. The black marks like defaults or Clearouts placed there by creditors show up on our credit file for between 5 and 7 years. Bad credit can limit our choices and can perpetuate the debt cycle by leading us to choose loans with higher interest rates and more fees, so the struggle to make repayments can be even harder. People should think hard about their ability to repay any credit, whatever the circumstances to avoid this situation. But if you have bad credit history which for some reason should not be there, which is stopping you from obtaining credit that you can repay, you would be a candidate for credit repair. Contact MyCRA Credit Rating Repairs on 1300 667 218 to talk to us about how we can help you recover your ability to obtain credit and give you back your financial freedom.

    Top Image: adamr/ www.FreeDigitalPhotos.net

  • How to fix a bad credit rating – in Australia

    How do you fix a bad credit rating? Well it depends on where you live. In Australia it can be difficult, but not impossible. Australians are best to follow advice from our own shores. Here’s some information on credit reporting in Australia and 5 ways you can improve your chances of obtaining credit.

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

    Google ‘fix bad credit rating’ and the list of articles on improving your credit score can be a mile long with countless advice on bad credit solutions and suggestions to fix what the banks see as bad credit history. People are looking for a way to overturn or ‘counteract’ a bad credit listing and get the best chance of approval for home loans, personal loans or any forms of credit.

    What many don’t realise is that many articles from the U.S. and U.K. are not relevant on Australian shores. These countries have ‘positive’ credit reporting systems – very different from Australia’s. So the information, whilst good, often doesn’t apply for people in this country.

    In fact, many times if Australians follow that information they may actually be hindering their chances of obtaining credit in the current market, not helping it.

    So here is some information for people concerned about their credit rating, to have as a reference for what applies in this country for our unique credit reporting system.

    What exactly is my credit file?

    A credit file is made for every person who is credit active in Australia. The credit reporting agencies currently providing credit reports are Veda Advantage, Dun & Bradstreet, and Tasmanian Collection Service (if Tasmanian). There is also a new entrant Experian, but they are currently only collecting data.

    A person’s credit file contains their personal information. It also records any credit applications, all loans which are current and also records any adverse listings such as Defaults, Writs, Judgments, Clear-outs or Bankruptcies* which are issued under that person’s name.

    It is from this file that creditors make a decision whether or not to lend people money. This information is then available to banks and building societies; finance companies, utility providers, mobile phone companies and retail stores. These companies are all known as credit providers or creditors.

    Any creditor may place an adverse listing on a person’s credit file if an account has been in arrears for more than 60 days. This includes phone companies, utility companies, and gyms as well as banks, finance companies and retail stores – and the outstanding amount can be for as little as $100. These listings are current for between 5 and 7 years depending on the listing, and ‘drop off’ the credit file after this time.

    A negative credit reporting system

    Currently Australian credit reporting operates under a ‘negative’ system. This will change as Australia moves towards comprehensive credit reporting, but until then – the rules of the game are very different from many other countries.

    Only negative data is recorded on a person’s credit file. From this point of view – there is nothing people can do to counter-balance any negative data which is displayed on their credit file. It is either present – or not.

    So is there anything I can do to change my bad credit rating?

    The best thing you can do for your current and future credit rating is to make all of your repayments on time.

    You can’t remove negative listings from your credit file unless you dispute the listing. You also can’t counteract the effect of those listings with ‘positive’ credit information yet either.

    But there are a few other things you can do to improve how you appear to lenders potentially improving your chances of obtaining credit in Australia. Here are 5:

    1. Reduce credit limits.
    Lofty credit limits do not improve a person’s credit ‘risk’ assessment. If the loan applicant has a credit limit of say $20,000 on their credit card, the debt amount on that card will be calculated on $20,000 – even if the actual amount the applicant has owing on that card is only $5,000. So a potential borrower should seek to reduce any credit limits on cards or loans they currently hold.

    2. Reduce credit enquiries.
    Do not shop around for credit. Whenever a person other than the credit file holder makes an enquiry on their credit record – that enquiry is recorded on the person’s credit file. Currently there is no way of seeing on someone’s credit report if the loan was approved or not, only that the application was made. Some lenders are refusing home loan applications due to too many credit enquiries, such as two enquiries within thirty days or six within the year.

    3. Check credit file regularly.
    Anyone has the right to request a copy of their credit file, to see what is being said about them. This report is free for the credit file holder every 12 months. The request should be made to all the applicable credit reporting agencies, and a report will be made to the credit file holder within 10 working days.

    There is the potential for creditors to make mistakes when entering listings on credit files. So anyone who is credit active should check theirs, regardless of how diligent they think they may have been with their repayments.

    Many times people are unaware they have adverse listings on their file until they apply for credit and are refused. Unfortunately at that time it can be stressful, and they can lose the home or business they are trying to buy, or be forced to choose a different loan with a higher interest rate to accommodate their bad credit history.

    4. Pay any outstanding amounts.
    Currently even defaults which have been marked as paid may see you refused credit – but it can’t hurt to pay an overdue account if it should have been paid. Whilst the creditor cannot remove the listing, they can mark the listing as paid. Some lenders may overlook a default listing if other parts of the application present as low risk.

    5. Remove errors from your credit file.
    Adverse listings can sometimes occur due to identity theft; some people are caught in issues over separation from their spouse; some have been disputing the bill which went to default stage and many people are just victims of the fallout from inadequate billing procedures – wrong names, wrong addresses errors with creditor computer systems, and sometimes human error.

    You have the right to have any inconsistencies on your credit file rectified. People should bear in mind that listings are not removed by creditors unless the credit file holder can provide adequate reason and lots of evidence as to why the listing should not be there.

    Credit reporting is governed by strict legislation of which most consumers have limited knowledge of, and often very little time to get to know.

    Many seek out the help of a reputable credit repairer who will be able to work on their behalf to assess their suitability for credit repair and then formulate a case based on legislation for removal – negotiating with creditors to have the default or other listing removed.

    People can visit the MyCRA Credit Repairs website for more help with their credit rating, and help to repair a bad credit rating.

    *Bankruptcies cannot be removed from credit files.

    Image: Stuart Miles / FreeDigitalPhotos.net

  • How to help more clients… A former award winning broker shows why the millions of Aussies with bad credit are not lost

    Those brokers who are just in it for the money are few and far between in this market.  Those that have hung around despite all the market conditions thrust upon them must have a passion for the job, and a drive to see people realise their dreams of home or business ownership. We show you why more of the people you come across every day could end up being your biggest fans and clients for life.

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

    As brokers, you are restrained by so many conditions which are simply out of your control in the current market.

    Left over from the Global Financial Crisis (GFC) are tighter lending conditions and nervous borrowers. Put this together with regulations for National Consumer Credit Protection (NCCP) compliance, and the result is unfortunately a diminished client base.

    Let’s face it – in this market, if you have to pick between a client with a perfect application or one which is slightly tarnished or impaired with bad credit (paid or unpaid), then it’s likely that you’ll choose the squeaky clean one…no headaches, no worries…and no extra indemnity insurance on a non-conforming loan.

    But most brokers do not know there is another way.

    In more than 9 out of 10 cases, bad credit history can actually be repaired. Engaging credit rating repair for a bad credit client gives the client the home at the best possible interest rates, and you the commission – and trail.

    Everyone wins.

    Plus, all parties are doing their part to help improve consistency in credit reporting through ensuring creditors enter listings fairly and accurately.

    For those who don’t know, here is how credit rating repair works…

    Bad credit can occur for a number of reasons:
    • Due to a dispute on a bill, such as a telephone or power bill;
    • Because of a change of address;
    • A major sudden upheaval such as illness or death;
    • Identity theft or fraud; or
    • Simple human error by the creditor

    The creditor defaults the consumer on one or more of their credit records held by the three (soon to be four) Credit Reporting Agencies in Australia.

    Defaults and other negative listing entries are strictly controlled by several pieces of legislation and several more codes of conduct. This aspect itself creates many grey areas and of course, is subject to interpretation.

    Consumers are blessed in Australia to live in a place where they are highly protected. Some of these protections are spelled out throughout the several thousand pages of legislation that works with and around Credit Reporting Law.

    Because the legislation is lengthy and involved, it gives those that are informed quite a lot of power. This knowledge is sometimes weighted heavily on the side of the creditor and leaves consumers with little ability to effect change in their own circumstances.

    For this reason, credit rating repairers have grown in popularity, as we are often the only people on the side of the consumer with the knowledge needed to fight the case on their behalf.

    As credit rating repairers we know this legislation. We review and consult it on a daily basis, looking to discover new and interesting methods to have bad credit set aside.

    During the process of discovery, we receive mountains of paperwork from your client’s creditors – which often include account statements, invoices, contracts and file notes.

    We review this documentation, constantly referring back to the legislation to formulate a case for your client. Once we are aware of any errors in the way the listing was added to your client’s credit report, we alert the creditor that the listing may be unlawful and request its immediate removal.

    At this stage it can sometimes get interesting, as many creditors genuinely believe that what they have done has been lawful and it’s up to us to educate them on where they have made errors.

    Occasionally, this can be a lengthy process and sometimes it may require the assistance and rulings of external governmental bodies.

    In more than 9 out of 10 cases, your client will be victorious. They can then go back to you to have their mortgage approved, their home loan settled, and their family can move into their very own home.

    I’m imagining a blue, round kiddie pool in the backyard, with a little sandy coloured puppy chasing the kids as they run up the slide to the cubby house, laughing and giggling all the way. That was my backyard a few years ago. My kids are all grown up now – one is about to get married. But those fond memories of us as a young family in our own home still remain.

    That is the power you have in your hands right now – to make someone’s dreams come true.

    Contact MyCRA Credit Rating Repairs tollfree on 1300 667 218 to speak with a consultant about our broker referral system.

     

    About Graham Doessel and MyCRA Credit Rating Repairs.

    Graham Doessel is the founder and CEO of MyCRA Credit Rating Repairs – Australia and New Zealand’s leading credit rating repair specialists.

    Graham’s origins are in finance, and he formed/owned the award-winning non-conforming brokerage “Mortgage Now.”
    Graham is a consistent spokesperson in the media for credit reporting issues in Australia and New Zealand.

    MyCRA Credit Rating Repairs, now in its fourth year of operation, has recorded an impressive track record of up to 91.7% rate of removal of inconsistent or inaccurate negative data from the Australian and New Zealand credit reports of both consumers and commercial entities.

    Graham and MyCRA Credit Rating Repairs are proud to be a part of developing a self-regulating framework for the credit rating repair industry through the lead role in the formation of a credit rating repair industry body.

    MyCRA Credit Rating Repairs is nominated for the 2012 Telstra Small Business Awards and the 2012 Start-Up Smart Awards.

  • Older Australians at risk of cybercrime: Super funds a prime target

    Personal information has become a valuable commodity in cybercrime circles. It can be extracted, abused and traded for identity theft purposes and to take advantage of someone’s good credit rating. And as many older Australians are finding out – it can also be pilfered to make some crook wealthy through hijacking Super Funds – without the victim knowing a thing about it.

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

    Australian Federal Police warn that older Australians may be susceptible to identity theft, phishing and data mining activities and in particular Superannuation Fraud, according to Technology Spectator.

    Its article ‘Super funds under threat from cyber criminals: AFP’ also reveals that this susceptibility is coupled with a lack of protection around identity verification with self-managed super-funds.

    An Australian Federal Police submission to the Joint Select Committee of Cyber Security recommends wider education about internet awareness for older Australians.

    The AFP says the combination of wealth and size of this population demographic is tempting for fraudsters:

    “Seniors citizens are accessible, they represent the fastest growing demographic in our ageing population and they hold a large portion of Australia’s wealth. Therefore, they are an attractive potential target for, and may fall victim to, an array of scams and frauds,” the AFP said in their report.

    In June last year we blogged about the growing trend of hacking super funds in a post titled ‘Identity theft News: Latest Warnings and Recommendations’.

    At the time, NSW Police had advised the public of a scam targeting Super Accounts, where fraudsters were stealing enough information from unsuspecting victims to transfer their Super into self-managed funds which could then be easily accessed by the criminals. In effect, criminals were hijacking Super funds.

    Fraud Squad Commander Detective Superintendent Col Dyson said “Superannuation fraud…works well because no-one checks their super…victims rarely notice account changes, making it easy for criminals to change mailing addresses.”  Read more on this story ‘Crooks siphon super funds,’ on CRN Australia’s website.

    Unfortunately, unlike bank fraud, there is no obligation for superannuation funds to reimburse victims, and if the fraud occurs on overseas shores, there is unfortunately very little chance of recovering the stolen money.

    There is also the chance that personal information may be further abused by fraudsters taking out credit in the victim’s name once the Super transfer is successful. This can lead to a series of defaults and bad credit history, which can be hard to recover from.

    People should contact Police for what to do if they have been a victim of Superannuation Fraud or any form of identity theft.  They may advise of the victim’s possible eligibility for a Commonwealth Victims of Identity Crime Certificate, which would at least aid in talking to creditors when the victim attempts to remove their bad credit history and recover their good name.

    People should also check their credit report for any signs of misuse – changes in contact information, strange credit enquiries they didn’t initiate and even new credit can all be signs of identity theft. A credit report is free every year, and can be obtained from the credit reporting agencies.

    For help with identity theft recovery, or for more information on identity theft and how it can affect a person’s credit file, contact MyCRA Credit Rating Repairs on 1300 667 218 or www.mycra.com.au.

    Image: Ambro / FreeDigitalPhotos.net