MyCRA Specialist Credit Repair Lawyers

Tag: Dun & Bradstreet

  • 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.

     

  • Businesses on verge of default: Cash flow issues leave more businesses unable to pay bills on time

    According to credit reporting agency Dun & Bradstreet, the June quarter came up grim for Australian businesses and particularly small business repayment terms. The number of businesses paying their bills on time fell considerably. It is predicted this will have a flow on effect to the whole economy.  We look at Dun & Bradstreet’s report, the ramifications for those individual businesses when it comes to commercial and personal credit rating defaults, and offer some simple ideas for managing business cash flow and keeping a clear credit file.

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

    According to the latest Dun & Bradstreet Trade Payments Analysis – examining the ability of firms to pay their bills, and pay them on time – the number of payments falling within the standard 30-day term fell 16.5 per cent quarter-on-quarter.

    Further underscoring the deteriorating conditions faced by businesses is the performance of small businesses, which recorded the biggest deterioration in payment terms of 2.2 days. Businesses with between one and five employees are now operating under an average term closer to that of larger firms, at 53.2 days.

    Dun & Bradstreet attributes simple lack of cash flow as the reason for the decline in businesses meeting the standard 30-day term.

    D & B Director, Adam Siddique, says cash flow issues within the small business sector will have a significant knock-on effect to the rest of the economy.

    “It is particularly concerning that SMEs are waiting longer to be paid, and as a result are taking longer to pay their own bills. Trade credit constitutes a significant and critical portion of non-banking finance.  When this is delayed, it withholds millions of dollars from businesses and the wider economy,” Mr Siddique said in a statement to the media .

    “Small business payment terms now more closely resemble those of a large corporation, however small operations are less equipped to manage for cash flow issues, particularly if they are waiting more than two months to be paid for goods and services.”

    In addition, two-thirds (62%) of all trade payments were late during the second quarter.

    The number of severely delinquent payments (90+ days overdue) also rose noticeably during the last 12 months – up 13 per cent since the June quarter last year.

    Mr Siddique predicts economic uncertainty and conservative consumers will continue to impede cash flow for businesses through the rest of 2012.

    He warns businesses to remain focused on the ‘fundamentals’ such as cash flow.

    “A proactive approach to risk and receivables management can often prevent a situation where businesses wait months to be paid,” he says.

    With the threat of delinquency facing many more commercial credit ratings in the small business sector, it is important to realise the connection to personal credit ratings that can often follow the small business default.

    Small business owners who allow overdue accounts to become the norm during the course of business could be unaware of the ramifications for not only the future of their commercial credit rating, but their personal credit rating as well.

    People should not take trade credit lightly, as it can impact both credit files. This applies to both outgoing and incoming accounts. Dropping the ball on either is not the best way to ensure repayments continue to be made within standard terms of trade. If repayments are delinquent, creditors can place defaults on the business credit rating.  But often the owner finds out as Director this is tied in to their personal credit rating as well.

    Long after the business problems are over, the owner can be haunted by this bad credit and denied the basics for their family – mortgages, car loans, credit cards, even mobile phones for 5 years. For someone recovering from a business failure, this can be completely debilitating, particularly if savings have previously been thrown at the business to try to keep it afloat.

    Here’s some ideas for the best ways a business can keep track of its cash flow and stay in the clear with their credit rating:

    1. Pay all accounts on time. Have systems in place whereby credit cards and all bills are paid on schedule if not by the Director then by Administration. If the business is running behind, creditors need to be contacted and payment plans possibly worked out before the due dates to best avoid a default listing.

    2. Ensure all accounts are paid in on time. Chase up bounced cheques and failures to pay immediately.  Too many accounts left unpaid can leave businesses short on cash and run the business into the ground if left to continue. People should regard any client non-payment as potential risks to their credit rating.  Develop a tactful system for retrieval ahead of time – reminding clients of the risks to their credit rating by defaulting on payments. If overdue accounts go beyond 60 days, businesses should notify the account holder in writing they will be referring the non-payment to a credit reporting agency.

    3. Consider credit checks for all potential account holders. As suggested by Sue Hirst in her article ‘Why You Need Good Terms of Trade’ (My Business Magazine August 2010) business owners should consider implementing a system of credit applications for potential clients who request a major account. This involves the business requiring a credit check on the prospective account holder with one or more of the major credit reporting agencies prior to undertaking a credit account with them.

    4. Regularly obtain a copy of both credit files –it is free for both consumer and commercial credit files once every year from one or more of the Australian credit reporting agencies. This will alert the owner early to any inconsistencies or errors on either business or personal credit files which could see their ability to obtain credit in jeopardy. If there are wrong defaults or mistakes on either the commercial or consumer credit file, it is important to address those inconsistencies immediately – and before it is a matter of urgency.

    5. Keep credit card limits within a set budget as specified by the needs of the company. Don’t be tempted to set a lofty limit to business credit cards as it may encourage needless spending and blow out the business budget.

    6. Be wary of excessive credit enquiries. People should get their credit health checked before applying for new credit, and only apply for credit they have full intention of pursuing.  Some lenders are rejecting loans for as little as two enquiries in 30 days, or six enquiries within the year.

    7. Most importantly, monitor accounts regularly.  Business owners still need hands on knowledge of the business’ expenses.  Check accounts are being paid and check receipts and credit card statements regularly.

    Bad credit attached to your business?

    If you are suffering with a bad credit rating, or have errors or mistakes on your credit file impacting your ability to get business credit, it would be well worth investigating whether you are suitable for credit repair.

    The criteria for credit repair success is generally people who have a credit listing that contains an error or errors, or people who believe their listing is unjust or incorrect.

    By engaging the services of a professional credit repairer, you are giving yourself and your business the best possible chance of being credit active again.

    Image: David Castillo Dominici/ www.FreeDigitalPhotos.net

    Image: sscreations/ www.FreeDigitalPhotos.net

  • 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.

  • Credit reporting accuracy supporters choose a board to front new Credit Repair Industry Association of Australasia

    Media Release

    Credit reporting accuracy supporters choose a board to front new Credit Repair Industry Association of Australasia

    22 May 2012

    Nine board members for a new industry body designed to give both credibility and voice to the credit repair industry and those promoting credit reporting accuracy in Australia have been ratified today.

    The Credit Repair Industry Association of Australasia (CRIAA) held its second meeting today to ratify expressions of interest for board members, with 9 key players from inside and outside the credit repair industry now appointed to an interim board.

    The meeting was chaired by President of the Finance Brokers’ Association of Australia (FBAA) Peter White.

    The board now includes 6 credit repair industry members, and three finance industry members, including Mr White.

    “I believe the Credit Repair Industry Association of Australasia will ensure that consumer rights are at the forefront of decisions made by the Credit Repair Industry,” he says.

    The CRIAA has also been shown support from Ombudsmen, various external stakeholders and credit reporting agencies including credit reporting agency Dun & Bradstreet President, Tim Lord.

    “We are interested in the role D&B could play in regard to the Board Structure and or the Advisory Panel,” Mr Lord says.

    The CRIAA is now looking to establish formal positions on the board, with one of the first tasks of this being to establish a framework for a Credit Rating Repair Code of Conduct.

    The Code of Conduct is planned to be devised to Australian Securities and Investments Commission (ASIC) guidelines to ensure members conduct themselves with high standards and ethics.

    Foundation member and now board member of the CRIAA – MyCRA Credit Rating Repairs CEO Graham Doessel has seen the need for a strong and consistent foundation for credit repair clients in an industry that has been largely unregulated and lacking formal standards.

    “The introduction of best practice standards for the credit repair industry means reputable credit rating repairers can stand above dodgy operators and set the standard for the industry. This will allow the real issue of credit reporting accuracy for consumers to be given the voice it deserves,” Mr Doessel says.

    This is a viewpoint shared by new CRIAA board member, Colleen Halls from Fix Credit Australia.

    “I most wholeheartedly agree that the industry needs to be regulated and needs definitive standards set with minimum qualification requirements,” Ms Halls says.

    The CRIAA also seeks to have an influence on decisions of credit reporting law moving forward – whether directly or indirectly.

    “The aim is to increase the legislative voice for those who are ultimately responsible for ensuring credit reporting accuracy. This voice belongs to consumers and the credit rating repairers who act on their behalf,” Mr Doessel says.

    CRIAA Interim Board Members

    Peter White    (FBAA)
    Graham Doessel    (MyCRA Credit Rating Repairs)
    Colleen Halls    (Fix Credit Australia)
    Alicia Candido   (We Fix Credit)
    Ilias Bafas   (Clean My Credit File)
    Gavin Symes   (Credit Repair Australia)
    Andrew Bell   (Fix Bad Credit)
    Darren Brits   (Alpha Lending)
    Kevin Allen   (Educated Finance)

    /ENDS.

    Please contact:

    Peter White – National President FBAA Board CRIAA
    Phone: (07) 3847 8119  president@fbaa.com.au

    Graham Doessel – Founder and CEO MyCRA Board CRIAA
    Ph 07 3124 7133

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

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

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

  • Credit reporting accuracy advocate throws credit rating repair fee structure under the spotlight

    Media Release

    Consumer advocate for credit reporting accuracy throws credit rating repair fee structure under the spotlight.

    26 April 2012

    A consumer advocate for accurate credit reporting says the fee structure for the credit rating repair industry must be investigated with a view to creating some best-practice reforms in the interests of consumers.

    Graham Doessel, foundation member of an industry body in the early stages of development, the Credit Rating Repair Industry Association of Australasia (CRIAA) and CEO of credit rating repair company MyCRA, says the industry is ripe for criticism for confusing consumers due to the vast differences in fee structure across credit rating repair companies and lack of clear guidelines for advertisement and configuration of customer payments.

    “Where the credit rating repair industry falls down, is that there are some inconsistencies in the way companies are delivering and advertising their services – some are not advertising their fees, some are charging way too much and delivering too little – and this creates mistrust across the board and tarnishes the reputation of what is actually a necessary service,” he explains.

    This mistrust was apparent in 2010 from credit reporting agency Dun & Bradstreet, who advised consumers in a media release to be wary of third party promises to remove negative listings from credit reports.

    “Dun & Bradstreet urges consumers to think carefully about these services arguing that not only are the third party fees unnecessary but promises to remove adverse events are often unfulfilled. Instead consumers should contact regulated credit reporting agencies directly to obtain a copy of their report and if they believe it contains any errors they can discuss that with the agency at no charge. If consumers do feel they need third party advice they should seek assistance from an independent financial counsellor or advisor,” Dun & Bradstreet advised (1).

    Mr Doessel says a good credit rating repairer is not only valid, but crucial to getting errors removed from consumer credit files.

    “Consumers are just not getting creditors to remove inconsistencies on their own. Yes, you can contact creditors and credit reporting agencies yourself and get credit file inaccuracies addressed – but it is a bit like defending yourself in Court. There’s just too much time involved in investigation, knowledge of legislation and negotiation ability required to make a successful case yourself,” he explains.

    He believes the implementation of the CRIAA as an industry body to help regulate codes of conduct for its members such as fee structure should give consumers and all associated entities the chance at being able to select a credit rating repairer whatever the customer business payment model and have faith that they will do the right thing by the consumer.

    “It’s about creating a level playing field for consumers – making it fair, and reasonable and giving them a system of redress from within the industry for any dodgy practices,” he says.

    Mr Doessel has published a White Paper titled Credit Rating Repair Customer Costs – A Tale of Two Business Models, which examines fee structure within the credit rating repair industry and sets out some recommendations for improvement on both models (2).

    One of the main points uncovered in the paper is the lack of clear advertisement of all fees and charges and definition of terms and conditions of payment across the board from credit rating repairers.

    “For instance, some no win – no fee customer business models can be vague in their advertising of both when payments are due, and exactly what defines a ‘win’. Also, some customers could be left angry when they find out they are charged administration costs regardless of success when it is not stated clearly these will be charged prior to the engagement of business,” he says.

    He hopes opening up for discussion customer business payment models in the credit rating repair industry will be the starting point for all relevant groups both in and out of the industry to provide their opinion on a best practice structure for customer fees.

    “Both the CRIAA and myself hope that by bringing credit rating repair customer costs into focus from all arenas we can come up with a framework which is successful and fair and which we can carry forward as the first stone which cements the entire industry and takes credit rating repair to new heights of credibility,” Mr Doessel says.

    /ENDS.

    Please contact:

    Graham Doessel – Founder CRIAA and CEO MyCRA         PH 3124 7133

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

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

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

    (1) http://www.dnbcreditreport.com.au/latest_news/consumers_should_be_wary_of_misleading_credit_report_offers/indexdl_6144.aspx

    (2) http://grahamdoessel.com/wp/credit-rating-repair-customer-costs-a-tale-of-two-business-models/

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

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

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

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

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

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

    Default expectations

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

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

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

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

    Credit use expectations

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

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

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

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

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

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

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

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

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

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

    The ramifications of overdue accounts

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

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

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

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

    What this could mean for Australian consumers

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

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

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

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

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

    Image: renjith krishnan/ FreeDigitalPhotos.net

    Image: Pixomar / FreeDigitalPhotos.net

  • Small business credit hard to obtain

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

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

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

    Here is an excerpt from that story:

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

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

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

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

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

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

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

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

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

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

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

    Image: renjith krishnan / FreeDigitalPhotos.net

  • How healthy is your credit rating?

    Your credit rating is just like your health.  You can get regular check- ups and maintain it, or you can wait until something goes wrong before you get it fixed. Knowing what’s on your credit file is the key to your financial freedom. Maintaining that credit file health will ensure you are able to continue to enjoy the benefits of obtaining credit now and for years to come.

    Graham Doessel, founder and CEO of national credit repair firm MyCRA Credit Rating Repairs and www.fixmybadcredit.com.au addresses some common questions about your credit file.

    WHAT is my credit rating?

    Your credit rating is really a file on your credit history, and is collated by the major credit reporting agencies on anyone who has ever been credit-active.

    Your credit file is then checked by any credit provider and is used to assess both the amount you are able to borrow and your ability to repay the loan.

    How do I find out what’s on my credit file?

    There are four major credit reporting agencies in Australia: Veda Advantage – which holds the credit file of over 14 million Australians, Dun and Bradstreet, Experian Australia and Tasmanian Collection Service (TASCOL) if in Tasmania.

    By law you are entitled to write to or email one of these agencies and request a copy of your credit file for free. It will take 10 working days from application to receive this information, or for a fee it can be provided within 3 working days.

    What is defined as a ‘bad’ credit rating?

    In broad terms, any defaults, clear outs, court Judgments or writs, external administrations and bankruptcies are all recorded on your credit file and would be considered ‘bad’ credit history by most credit providers.

    In this current economic climate basic defaults and even too many credit enquiries or applications for credit may be considered to be bad credit history.

    How do I get a bad credit rating?

    What is not realised by many people is how easy it is to have a default slapped on your credit file – which will show up as bad credit history.  If a bill is more than 60 days late, (including rates, power and mobile phone bills) then a credit provider has the right to notify you of their intentions to record this default on your credit file. Even if this bill is paid, the default usually remains on your record for 5 years.

    What are the repercussions of having a bad credit rating?

    A bad credit file can severely hamper your chances of obtaining any credit. Your credit health can determine whether you can take out credit cards, personal loans, car loans, enter into mobile phone plans, and of course take out a mortgage.

    What can I do to fix my credit rating?

    After checking your credit file, there are three things to consider:

    1. The accuracy of the report.  If there are errors, however small, you have the right to have them rectified.  Likewise, if there are numerous strange defaults and or applications for credit that we don’t recognise – contact Police immediately in case of identity theft.

    2. Check you were informed of any intention to list.

    3. Check the fairness of the listing.

    If your file does contain defaults, writs or judgments that you believe are incorrect, unjust or just shouldn’t be there, there is a good chance they can be removed.

    You can work with your own credit file to have the defaults removed, or you can contact a third party ‘professional credit repairer’ to help you.

    How can a professional credit rating repairer fix my credit rating?

    If people find inconsistencies on their credit report, in the past they have run into difficulty trying to get the offending black marks removed.

    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. Many individuals find it extremely difficult to apply the letter of the law in their own circumstances and so end up seeking someone out a professional credit repairer, who can work on their behalf.

    Credit repair requires knowledge of the legislation, lots of evidence, tenacity and perseverance – which a good quality professional credit repairer will have.

    Professional credit repairers have also built successful relationships with agencies and creditors alike, and have a better ability to negotiate the listing’s removal on the client’s behalf.

    What can I do to ensure I maintain credit file health?

    1. Pay all accounts on time. This is the easiest way to ensure there are no adverse listings on your credit file.  If you are struggling to make repayments – contact the creditor about a repayment scheme.

    2. Regularly obtain a copy of your credit file – once a year is recommended to ensure accuracy.

    3. Be aware of excessive credit enquiries. If you are not sure about your credit health, you should get it checked before applying for new credit.  Some lenders are rejecting loans for as little as two enquiries in 30 days, or six enquiries within the year. Also avoid ‘shopping around’ for credit, as whether or not the loan was approved doesn’t show up on your credit report – only the fact that you made the enquiry.

    If you are seeking advice on credit file health from a professional credit repairer, contact MyCRA Credit Rating Repairs on www.mycra.com.au or tollfree 1300 667 218.

    Image: Imagerymajestic/ FreeDigitalPhotos.net

  • What you may not know about taking out credit in Australia

    Many Australians are very unaware of what happens behind the scenes when they take out credit. We break it down and show you what it involves, and how your good name and ability to continually obtain credit all  hinders on what creditors say about you on your ‘credit file’.

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

    What is being ‘credit active’?

    When you take out your first piece of credit – you become ‘credit active’. This could be a mobile phone plan, a loan with a bank, a credit card, or even a utility account. The creditor opens up a credit file in your name with one or more of Australia’s credit reporting agencies – Veda Advantage, Dun & Bradstreet, Tasmanian Collection Services TASCOL (if in Tasmania) or new entrant Experian Australia.

    What is on my credit file?

    Your credit file details all of your personally identifiable information including full name, date of birth, current address and also the type of credit that has been taken out now and in the past. Also recorded, are any times you have applied for credit ‘credit enquiries’ and any negative notations put there by creditors during the course of the credit agreement.

    What is a credit rating?

    Your credit rating is a term used for what happens when a potential creditor makes a request to see what is reported about you on your credit file. The creditor uses the information on your credit file to determine the amount you are able to borrow and your ability to repay the loan.

    What is defined as a ‘bad’ credit rating?

    In broad terms, any credit defaults, court actions or writs, external administrations and bankruptcy are all recorded on your credit file and would be considered ‘bad’ credit history by most credit providers.
    In this current economic climate basic defaults and even too many credit enquiries or applications for credit may be considered to be tarnishes on your credit rating.

    How do I get a bad credit rating?

    If you fail to make repayments on any credit account past 60 days, then by Australian law the creditor has the right to notify you in writing of their intention to list the non-payment as a default on your credit file. This default remains present on your credit file for 5 years, after which time it drops off. If the creditor can’t contact you, and suspects you have left the premises or tried to avoid contact – they may list the non-payment as a ‘clear-out’ which means you would incur 7 years of bad credit.

    How do I know if I have a bad credit rating?

    Most people know they have a bad credit rating, because the creditor has advised them in writing that they intend to list something negative on their credit file. But many times, people are not aware they have a bad credit rating until they apply for a loan and a ‘surprise’ default or clear-out shows up.

    If you are unsure what is on your credit file, you should take the time to find out.

    The three major credit reporting agencies in Australia hold the credit file of millions of Australians. Veda Advantage alone holds over 14 million credit files.

    You can write to or email one of these agencies and request a credit report, which is a copy of your credit file.  If you are not in a hurry then under Australian law your credit report is free, and will be sent within 10 working days from application to receive this information. There are further charges for a faster service with many agencies.

    I have found a default on my credit rating, what are the consequences of this?

    If you discover you have a bad credit file, you will find it very difficult to obtain credit in the future. Generally this problem will keep occurring for the 5 years the default is on your file. This will probably prevent you from obtaining a home loan with most lenders and possibly lead to credit refusal of many kinds from cards to phone plans. Even if this bill is paid and noted on your file, this default usually remains on your record for 5 years and will be a detriment to any further credit you wish to take out during this time.

    What can I do to fix the default on my credit rating?

    Once you have obtained a report there are three things to consider about the negative listing:
    1. Is it accurate?
    2. Was I informed?
    3. Is it fair?

    If the report contains errors, or inconsistencies with the credit reporting process, be aware you do have the right to have errors rectified.  Creditors do make mistakes in credit reporting. The way we handle it can be make-or-break for our good credit rating.

    In many cases where people have attempted to remove the default themselves, they have come across difficulties and defaults have not been cleared. Most times the creditor will explain to the client that defaults DONT EVER get removed. The best they can do is mark the listing as paid (if it’s been paid).  This may be both unfair and may not be sufficient to ensure credit is obtained with some lenders.

    Can I employ someone to fix my bad credit?

    If you have a default, writ or Judgment that has errors or just shouldn’t be there – there is a good chance that a professional credit repairer can actually remove it – meaning your financial future is looking a whole lot brighter.

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

    Can I make positive changes to my credit file?

    As the legislation currently stands in Australia, there is no way of off-setting bad credit history with ‘good’ credit history. Currently only negative entries are recorded – so you are considered to have good credit history if your credit file is essentially clear.

    Australia is moving towards a form of positive credit reporting this year – but we believe banks will still not take kindly to any form of negative entry on a person’s credit file in this current economic climate.

    How do I keep a clear credit rating?

    To avoid a bad credit rating, it is essential to make repayments on time! If there is a problem with a bill, you still need to pay it on time. If there is hardship and you are finding repayments difficult, tell creditors. Most creditors have policies in place to assist with financial difficulties – but you must tell them to be eligible for this.

    Keep your contact details current with your creditors so if there are problems they can contact you.

    And make sure there are no mistakes on your credit file…

    The best thing every credit-active person can do is to keep abreast of what is being said about them on their credit file with those free yearly credit file checks. This way, if there’s anything that appears on there that you are not sure about, you can look into it and get your credit file cleared if it should not be there BEFORE you front up to apply for any new credit.

    If you have a bad credit rating, go through these 6 simple steps to see whether you may qualify for credit repair, or contact us tollfree on 1300 667 218 or visit our main website www.mycra.com.au :

    Image: vichie81 / FreeDigitalPhotos.net

    Image: renjith krishnan / FreeDigitalPhotos.net

  • As confidence returns, home buyers need to fix credit problems

    Good news may be on the horizon for the Aussie mortgage market. Mortgage sales for January 2012 have revealed a significant return in confidence for home buyers. But with that renewed confidence should come a forewarning for home buyers about how to make the most of preparations of savings records, wages and stability through matching it with a credit ‘clean up’ for easier finance approval.

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

    According to AFG (Australian Financial Group), mortgage sales for January 2012 have soared above figures for last year. It released its AFG Mortgage Index last week in which it showed national mortgage sales increased by 40% this January compared to last year. AFG says the changes mark a return to more normal trading levels.

    Sales in Queensland were up 80.6% and in South Australia 84.5%, with other states showing significant uplifts compared to January 2010 ? WA (+ 37.4%), Vic (+25%), NSW (+14.5%).

    January also saw WA take over from NSW as the most popular state for First Home Buyers. Almost one in five new mortgages (19.1%) in WA was arranged for First Home Buyers compared to 14.0% in NSW. Through the second half of last year, NSW led the country as the most active First Home Buyers market.

    However NSW retains its position as the most popular state for investment, with 40.2% of loans there arranged for investment purposes, compared to 36.8% in Victoria, 34.9% in Queensland, 32.6% in Western Australia and 32.0% in South Australia.

    Although confidence might have returned, there will still be a significant number of home buyers who fail to realise their home ownership dreams due to a bad credit report. It is estimated there are approximately 3.47 million Australians who have a bad credit rating (negative listings on their credit file). (Veda November 2008).

    As credit repairers, we meet many people who seek help to fix credit problems, and astoundingly, many of those people should qualify for a home loan. It may surprise people to know that many prospective borrowers we see have significant savings records, or even currently own property and have good income. They can be knocked back for finance by a bad credit history that should not be there.

    Do you need a credit clean up?

    Many credit files contain errors or inconsistencies due to simple human error from creditors, or from creditors simply not complying with credit reporting legislation. Often it is not until people apply for a home loan that they find out about them. Even if people already own property, they can be banned from refinancing, investing, or from upgrading their home due to credit rating defaults or other credit file problems.

    Any negative listing – from defaults, to Judgments and even excess credit enquiries will stop most people from getting a home loan in this market, or force them into a high-interest loan, costing them thousands more in interest.

    Negative listings remain on a person’s credit file for 5 -7 years, depending on the listing type. These black marks can show up for outstanding bills as low as $100.

    Credit file errors

    A survey by Choice Magazine as far back as 2004 points to approximately 30% of the credit files in the survey likely to contain errors. That’s a staggering amount of credit file errors potentially out there.

    Recently Channel 7’s Today Tonight interviewed Veda Advantage’s Head of External Relations, Chris Gration on the possible number of errors on credit reports. He admitted errors within their system alone amounted to 1%.

    “We give out about 250,000 credit reports to consumers every year. But only in 1 per cent of cases is there a material error on the file, so a default or an enquiry that’s incorrect,” Mr Gration told Today Tonight.

    Even if as little as 1 per cent of those 14 million credit files contained errors, that would still currently leave 140,000 credit files in Australia containing errors that just shouldn’t be there.

    The nature of credit reporting is that there is much opportunity for human error and these errors are usually not uncovered until people go about checking their credit file. Often people are unaware of their responsibility to maintain the accuracy of their own credit file – and so they don’t find out about their credit issues until they apply for a home loan.

    Then, once people find problems with their credit file – they often find the process of removal of errors from their credit report difficult.

    What is the best way to fix credit problems?

    Current legislation does allow people to have inconsistencies removed from their credit file, but in reality many people are not successful when they attempt to fix it themselves.

    Often it is because they are not schooled enough in the legislation or can’t devote the necessary time to it to ensure a successful credit repair. Sometimes people who attempt to fix credit problems themselves can do more harm than good through lack of knowledge, or difficulty in negotiating with creditors or by alerting them too early to mistakes on the credit file.

    A borrower’s credit file is one of the key factors to home loan approval. People should not underestimate this factor.

    Make it right with a credit file check and credit clean up before you apply for a home loan

    It is important to get it right, and the onus is on the credit file holder to maintain its accuracy. House hunters can and should request a free copy of their credit file every year from one or more of the credit reporting agencies such as Veda Advantage, Dun and Bradstreet or Tasmanian Collection Services (TASCOL) if Tasmanian.

    A free copy of their credit report will be mailed to them within 10 working days. A creditor may have place a negative listing with all or one of these credit reporting agencies. If there are any inconsistencies, they should seek a reputable credit repairer for a credit clean up.

    ABS Statistics differ

    AFG statistics are currently projecting significantly more confidence than the latest data from Australian Bureau of Statistics figures shows, particularly in Queensland.

    The November Lending Finance Statistics show the number of owner occupied housing commitments in Queensland stayed flat in October to November, recording a 0.0% change in Queensland.

    We will watch avidly to see if data from AFG matches with the ABS’ review of January housing finance and lending statisitcs due out in March.

    For brokers, agents and property owners – rising mortgage rates in many states and particularly in post-flood ravaged Queensland, would be very good news indeed.

    Image: Danilo Rizzuti/ FreeDigitalPhotos.net

  • How to keep your credit rating healthy

    7 ways to keep a squeaky clean credit file and get that home loan or finance….

    By Graham Doessel.

    Many people don’t realise how easy it is to get a bad credit rating, or how difficult credit repair can be.

    A clear credit file is so important because it is the key to your financial freedom. In today’s economic times, it is essential that your credit file be kept clear of any black marks.

    Any defaults (overdue accounts which have lapsed past 60 days), writs, judgements or bankruptcies which are recorded on your credit file will remain there for 5 years.

    A bad credit rating can prevent you from obtaining a mortgage, car or personal loan with banks but many don’t know it can also prevent you from obtaining a simple mobile phone plan.

    So how do you go about avoiding a credit rating default and keep your credit rating looking as healthy as possible? Outlined below are 7 essential tips:

    1. Use credit
    It may be tempting to get rid of all credit. But it is easier to obtain credit for a mortgage or business loan if there is some kind of reference of your credit history on your credit file. Taking out small accounts such as a mobile phone plan may be a good choice as long is each payment is made on time.

    2. Pay bills on time
    If you pay all accounts on time and by the due date, there is less chance you could receive a default listing on your credit file. If you can’t pay your account by the due date don’t bury your head in the sand – call the creditor and try to work out some type of payment plan.
    This contact may be enough to ensure your credit rating is not tarnished. If you receive a bill you don’t agree with, it is still essential to pay the account by the due date to avoid a default listing. Better to make the payment and be reimbursed for the difference than be paying for 5 years for someone else’s mistake.

    3. Be smart with credit
    Credit should be the key to financial freedom, but often it is the source of a great many problems in people’s lives. Yahoo’s Money and Your Life website has help for managing debt and finances. This article has some great tips for keeping credit under control and making it work for you http://au.pfinance.yahoo.com/moneyand yourlife/managing-debt/article/-/8044026/expert-tips-for-cutting-credit-card-debt/.

    4. Be aware of excessive credit enquiries.
    You should only apply for credit if you feel you have a very good chance of being approved. Declined credit applications on your credit file can hinder your chances of obtaining a home loan. Likewise, you should only apply for credit you have full intention of pursuing. Every application is noted on your credit file, but not whether it was approved. If you go ‘credit shopping’ and apply for credit everywhere – the lender may consider you a bad risk due to those excessive credit enquiries showing up on your credit report.

    5. Educate yourself on ways your credit rating can be damaged
    It may not be simple overdue accounts which leave you with a bad credit file. People who have recently divorced or separated are particularly vulnerable to problems due to joint accounts. Also victims of identity theft can have a number of defaults on their credit file they are unaware of. Often times simple errors can occur which you aren’t aware of until you apply for credit and are flatly refused.

    6. Check your credit file regularly
    It’s important to check your credit file and understand what lenders may be seeing on your credit rating. Usually every 12 months should pick up any discrepancies that may need addressing.

    Under current legislation you can obtain your credit report for free from the major credit reporting agencies Veda Advantage, Dun & Bradstreet, and TASCOL (Tasmanian Collection Services). Your credit report will be sent to you within 10 working days.

    7. Fix credit rating
    If you do find credit rating defaults that you believe have errors, are unjust or you feel just shouldn’t be there – there is a good chance they can be removed. Many creditors will tell individuals that a default can never be removed, but can be marked as paid if it has been paid. This may not be enough to ensure credit is obtained with many lenders.

    You may be better off seeking the services of a reputable credit repair company than attempting to negotiate with creditors on your own to fix your credit rating. The credit repairer will negotiate on your behalf, working with creditors and understanding current legislation and how it applies to your credit file.
    Sometimes if individuals are unskilled in the current legislation they can do more harm than good when it comes to credit rating repairs.

    Visit the MyCRA Credit Repairs website www.mycra.com.au to get more information or help with your credit file or contact us tollfree 1300 667 218.

    Image: digitalart/ Freedigitalphotos.net

  • Till debt do us part: Navigating joint finances

    Some people are great with money – but can still experience financial downfalls and sprial into debt and a bad credit rating due to the shortcomings of their partners.

    Often people are unaware their partner is generating defaults on their credit rating until it is too late. They apply for credit in their own right and are unable to proceed due to debts and bad credit their partner has initiated while they are together.

    Often we hear from clients “I’m not sure how this happened – how can I be responsible for something my partner did?” Unfortunately when couples go into joint debt, both credit files are at risk if repayments aren’t made.

    So how do people protect themselves, their assets and their good credit rating, BEFORE they marry or move in together?

    Recently savingsguide.com.au looked into this issue in their post ‘The Debt Affair: When your partner is hiding debt’.

    They talk about establishing financial boundaries when people are new in a relationship. The article talks about the signs to watch out for when people suspect their partner is hiding debt.

    Some of those include:

    -Assume that the truth may be stretched when it comes to money
    -Often money problems can be a result of another issue: stress, addiction, self-esteem.
    -Discussing money is taboo
    -Do their spending patterns show they spend more than they have?
    -Ask for full disclosure

    People should remember that relationships in their new stage are some of the most exciting times in our lives. But when it comes to taking the next step and moving in together, everyone should ask about their partner’s financial past.

    Otherwise they may be forced to suffer with a bad credit rating due to mistakes made by partners – past or present.

    Bad credit is such a phenomenal problem in this day and age, with lots of people living beyond their means and creditors eager to issue defaults.

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

    People should sit down together before any ties are made and discussing what financial position the other is in. Ask whether they have any debt; talk about paying bills; get a general feel for how this person regards money and finances. If they appear too blasé about money, this should ring alarm bells. It may not mean the relationship needs to end, but it should mean you keep finances separate for a significant period of time. You could also suggest getting a copy of your credit files to see if there are any blemishes.

    A credit file is compiled on any person who has ever been ‘credit active’. It lists personal details like name and address, but also any times the person has applied for credit, any defaults (overdue accounts), court judgements, writs and bankruptcies.
    Prospective partners can request a copy of their credit file for free from the major credit reporting agencies – Veda Advantage, Dun & Bradstreet or Tasmanian Collection Services (if you are Tasmanian) and Experian. This will be provided within 10 working days.

    Any black marks on a person’s credit file remains on their file for 5 years and can greatly hinder a person’s chances of receiving further credit.
    A bad credit rating sticks. Most clients find they are black listed from credit for a five year period following a default on their record. Even having too many credit enquiries or a default from a simple unpaid phone bill can be enough to be refused a home loan with most lenders in the current economic climate.

    My CRA Credit Repairs has some tips for people entering into a new ‘financial’ relationship:

    •When you enter into any financial agreement with another person – don’t bury your head in the sand when it comes to the repayments. Regularly check your statements and bills so you can catch problems early.
    •Be aware that as high as emotions can run, they can also get just as low. Your financial generosity now could become the very thing that is used against you if the relationship sours. Consider carefully how secure you would be in each transaction if things did take a turn for the worse.
    •Consider keeping some things separate. Just because you have bought a home together doesn’t mean you can’t keep other bank accounts, credit card and previous homes in your name only.
    •Get a copy of your credit file regularly. This will notify you of any problems before you apply for credit in the future.

    Contact MyCRA Credit Repairs on 1300 667 218 for help with credit repair.
    Image: photostock/ FreeDigitalPhotos.net

  • Fears about data breaches are justified

    Media Release
    22 September 2011

    Australians have every right to be concerned about data breaches and loss of personal details, as personal information has become a valuable commodity used to commit identity fraud and potentially ruin the victim’s financial future, a national credit repairer says.

    Director of MyCRA Credit Repairs, Graham Doessel says a recent survey revealing concerns about data breaches shows we are all worried about where our personal information could be put at risk, and this is not without reason.

    “More and more of my clients have been through the ringer attempting to have black marks removed from their credit file due to identity theft, simply because our education, our legislation and our technology is unable to keep up with fraudsters. People want to know their details are going to be safe when they shop, when they use the internet and with the companies that have their details in their computer systems,” Mr Doessel says.

    This comes as a global survey reveals widespread concern over the security of personal information. A survey conducted online by Harris for US-based identity management specialist SailPoint, showed the majority of adults in the United States, Great Britain and Australia are worried about possible exposure of their personal information, and a large percentage of adults have lost confidence in how companies protect their personal information.

    “The widespread impact of data breaches like Epsilon and Sony PlayStation, where millions of consumers were impacted around the world, is making customers more cautious about conducting business with certain financial institutions and retailers,” said Jackie Gilbert, vice president of marketing and co-founder at SailPoint.

    Mr Doessel says personal information is like gold to identity thieves.

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

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

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

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

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

    Mr Doessel says the best defence an individual can take against identity theft is to get educated on how their personal information can be put at risk.

    “Sites like the Government’s SCAMwatch website, and the Stay smart online website, can give people good practical tips for keeping their information secure,” he says.

    But he also says in the case of data breaches, it comes down to a need to know basis.

    “At best we can minimise the amount of people who hold our personal information. People should always question the need for it to be handed over. If it is not essential, don’t do it.”

    “Unfortunately it seems everywhere we turn some company has been hacked – and it seems every entity with a computer is vulnerable. It is still extremely scary the level of risk our personal information undergoes these days when it is stored online,” he says.

    He says it is important for people to keep up to date with what is on their credit file, to be alerted to any entries which point to a theft of identity.

    Under current legislation a credit file report can be obtained for free every 12 months from the major credit reporting agencies Veda Advantage, Dun and Bradstreet , Tasmanian Collection Service and Experian and is sent to the owner of the credit file within 10 working days.

    For those who are vulnerable to identity theft, they can pay extra with credit reporting agency, Veda Advantage to have their file on an ‘alert’ system, which tracks any changes to their credit file that may occur within a 12 month period.

    Mr Doessel says people who suspect identity theft should report the matter immediately to Police, no matter how insignificant they think the fraud is.

    “This crime is not very widely reported. But it is only through people reporting identity theft that any real statistics get collated on this issue. Likewise, if people want to try and repair their credit rating, the first thing I tell them is to make sure they have a Police report,” he says.

    /ENDS

    Please contact:   Lisa Brewster – Media Relations   Mob: 0450 554 007 media@mycra.com.au
    Graham Doessel  – Director  Ph 07 3124 7133

    www.mycra.com.au www.mycra.com.au/blog

    246 Stafford Rd, STAFFORD Qld

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

    Link: SailPoint Survey

    Image: renjith krishnan/ FreeDigitalPhotos.net

  • Experian given green light by ACCC to enter Australian credit reporting

    Credit active individuals will have yet another company to contact when obtaining their credit history, and it will be as important as ever for people to check their credit file regularly.

    There is a new player in the credit reporting game, and it has some of Australia’s biggest lenders as its shareholders. Back in May, we blogged about the possibility of U.K. giant Experian entering Australian credit reporting, and speculated on what the issues may be for credit file holders in this country.

    Today newly appointed ACCC Chairman, Rod Simms announced his approval of Experian’s entrance into the Australian market. The Sydney Morning Herald ran a story titled Experian is allowed to report for duty. The article says Experian will challenge the other two major credit reporting agencies, Veda Advantage and Dun & Bradstreet for Australia’s major credit reporter.

    “The Australian Competition and Consumer Commission chairman yesterday decided there would be no substantial lessening of competition if Experian became the third sizeable in the Australian market – even if the big four banks and two other big US-backed lenders (Citigroup and GE Capital) are minority shareholders.

    Veda and the Dun and Bradstreet group have been the big players until now, and the banks are among their largest customers. There was a fear that the banks now have a financial incentive to put all their business through Experian, or at least choke off the supply of customer credit information to service providers that will in future be competitors.

    Sims and the ACCC accepted the banks’ argument that their backing of a new entrant to the market in Experian was in fact designed to increase competition by adding some pricing tension for services,” the article says.

    So where do consumers stand amongst this change? According to the ACCC, they are in an improved state. They acknowledged Experian’s argument that the benefits to having a new credit reporting agency like Experian, is the greater competition for accuracy and efficiency that will result.

    In addition to this, Australia’s move to new positive credit reporting laws will be enhanced by a company like Experian which is experienced in this type of data collection in the U.K.

    But what about the accuracy of credit reporting – will this be enhanced?

    Currently, there are several pieces of legislation, including the National Consumer Credit Protection Act and the Credit Reporting Code of Conduct 2009 which have gone a long way to improving the accuracy of credit reporting, by imposing tougher penalties for creditors who don’t comply with the Acts. The ACCC Chairman, in all likelihood probably found that legislation was strong enough to combat any conflict of interest that could have resulted from having the creditors also being minor shareholders in the credit reporting agency.

    Whilst Experian will be bound to comply with this legislation as the other agencies are, the onus is on the consumer to check the accuracy of their credit report. This is where the system could fall down – through simple lack of public education. Yearly credit file checks are currently not in abundance for most credit active individuals. When disputing any adverse listing, it is up to the credit file holder to provide reason as to
    why the creditor has not complied with legislation if they feel there are errors on their credit file.

    Current statistics from Choice Magazine from 2004 point to up to 34% of credit files in Australia likely to contain errors.

    What is concerning, is that many creditors are getting away
    with not complying with Australia’s strict credit reporting legislation because consumers are simply not checking their credit file for errors. People are only finding out about any defaults, writs or judgments on their file when they apply for credit. This guarantees them an automatic decline with the bank and leaves them angry and stressed if they feel the listing should not be there.

    If more was done to educate consumers as to their right to check their credit file for free every year, then people would have time to repair any errors when it is not urgent. It could also increase pressure for creditors to enhance the accuracy of credit reporting.

    Is there a conflict of interest in terms of accuracy when many major Australian creditors will be small shareholders in the credit reporting agency? The ACCC found this was not the case.

    Currently people can obtain a copy of their credit file for free every 12 months from one of the Australian credit reporting agencies, Veda Advantage, Dun & Bradstreet or Tasmanian Collection Services.

    We recommend everyone should be concerned about the accuracy of their credit file. A yearly check should provide a picture as to its accuracy, and allow them the opportunity to redress any errors which present on their file prior to needing credit.

    And for borrowers whose lender requires a credit check to
    secure finance? We predict their application fee just got more expensive with the introduction of the new agency – potentially paying for three or four credit reports instead of two to three.

     

  • Consumer debt reduction: Watch out for new bank fees

    Our last blog post was about debt struggles and solutions –and how people can protect their credit file. Featured in this post were recent findings from Dun & Bradstreet’s bi-annual debt survey, showing one in three Australians will struggle to repay their debts in the September quarter.

    The Sydney Morning Herald recently published an article featuring this survey, titled ‘Australians still hooked on credit’. It reported that many people are still heavily reliant on credit to purchase something they could otherwise not afford, despite the assessment of their household’s financial outlook now being at a 20-year low. But the article reports some sections of the population are reducing their credit use. It reports Mastercard as saying:

    “The austere mood caused the annual growth in credit card numbers in Australia to slow to 1.76 per cent in the 12 months to May. Purchases made on debit cards jumped 17.3 per cent during that time as consumers sought more control over their finances.”

    If the downward trend to reduce credit continues, people will become more reliant on debit cards and Eftpos to make their purchases.

    But as the Herald Sun reports in its article ‘Banks are busy working on ways to replace income lost from fees‘, people may be penalised for this change. It reports a new Eftpos tax will result in an extra 10c interchange fee and 1c EPAL scheme fee increase on Eftpos transactions starting October 1, 2011. Here is an excerpt from this story:

    The company that runs Eftpos, EPAL, has given banks until
    next month to opt in to its new, higher interchange fee structure.

    “Banks are about to start charging for something they previously provided for free,” said Jost Stollmann, chief executive of a rival player in the debit-card payment industry, Tyro Payments.

    “In fact they supplied this service for less than free: they paid 5c each time someone used Eftpos.”

    “Now EPAL has reversed that subsidy and created a new 5c fee to acquirers, which will flow through to retailers and merchants.”

    The Australian Newsagents’ Federation say the new Eftpos fee
    regime will impose fees of up to 21c for each Eftpos transaction, up 110 per cent on existing fees.

    “No retailer can negotiate the interchange fee with his bank. The new EPAL regime is all about raising bank fees,” the federation says in a new advertising campaign.

    The story explains how banks have cut out exit fees on home loans, and many of the other fees that consumers have traditionally complained about, but have cleverly sought alternative ways of replacing the lost fees. It reports one way of recovering lost revenue from exit fees is to increase ongoing fees on home loans. The story reports fees in this area have increased on average around $75 a year since 2009. Also some banks have announced increased upfront fees on some of their variable home loans recently. The highest upfront fee increase was $600 on one Commonwealth Bank product.

    So consumers will have to bear the cost of reduced fees in some areas, with increased fees in others. If people want to refinance to a cheaper interest rate to save money, they won’t pay exit fees to leave that home loan – but they could pay higher upfront fees on many of the new loans they may want to switch to. Hmmm….

    Is the process of saving money and reducing debt just getting more difficult to navigate?

    How do we know the best ways to save money?

    For those who, despite all of the obstacles to success are determined to reduce debt – the best place to start is to get interested and updated on ways to save money. We encourage people to get educated about debt, and ways to avoid a bad credit rating, which can ruin people’s ability to obtain good credit for 5-7 years.

    The fact is credit is an essential part of being money smart in today’s society. Unfortunately we need credit. People can’t go back to wacking the money under the mattress. They simply cannot function without savings records and credit history in order to obtain major credit like mortgages and personal loans. So to succeed, it’s a matter of being educated about smart ways to use credit.

    There are a number of great places to start getting educated. We love the advice given on Australian blog Savingsguide. Also extremely informative is ASIC’s Money smart website. Of course, we can’t go past a trusted favourite like MSN Money.

    If people find despite their education on money principles, they still can’t get ahead due to the disadvantage of having credit rating defaults, writs or Judgments – it may be possible to start with a clean slate by having them removed. Not all credit files can be repaired, but those which contain adverse listings with errors, which are unjust or just shouldn’t be there are good candidates. Credit repairers completely remove defaults, writs or Judgments from people’s credit files, allowing people the financial freedom to choose the best interest rates, and financial products which are right for
    them. For example, people who are living with a bad credit rating who invest in credit repair can potentially save thousands on interest by the ability to select a cheaper interest rate. Contact us at MyCRA Credit Repairs for more information.

    Image: Salvatore Vuono / FreeDigitalPhotos.net

    Image: Ambro / FreeDigitalPhotos.net