MyCRA Specialist Credit Repair Lawyers

Tag: first home buyers

  • Is the 2014 Federal Budget a mortgage killer?

    mortgage killerWe look at Tony Abbott and Joe Hockey’s Federal Budget in detail to determine what the possible ramifications could be for those who will buy a home in the future. Whether you agree with the decisions handed down or not, we look at how the choices in ‘Federal Budget 2014’ could impact home buyers both now and in the future. We also look at the possible ramifications for credit expectations and the credit files of those in the firing line.

    By Graham Doessel, Non-Legal Director of MyCRA Lawyers www.mycralawyers.com.au.

    The property industry has been given a partial reprieve under the Federal Budget 2014, with negative gearing surviving, despite predictions it would be axed. The Government had also said during the Budget announcement that it expected interest rates to remain low in the near future, which is good news for home buyers and mortgage professionals.

    But there are still a number of substantial areas in the Budget which cause negative fall out to filter down to Australian home buyers and be felt on the frontline of the mortgage industry, and we examine them.

    Changes to unemployment benefits 

    There has been controversy about the Government’s harsh new rules on unemployment benefits. The unemployed who are 25-30 years old will have to wait 6 months to receive the Newstart Allowance. But despite the damning headlines, the rules aren’t quite as harsh as they appear. If an applicant was previously employed, the waiting time will be reduced one month for every year they had been employed. This means that if someone has legitimately lost a job prior to 6 or more years of work, they will be exempt from the government’s new stipulations.

    It sounds like a good plan to boost employment, which could in turn be good for the housing and finance industries, except it seems to leave the potential for many people to be quite disadvantaged.

    For those who are forced to wait a month or two before they can receive Newstart, there could still be problems. For instance, how is a 25-30 year old who lives out of home, who perhaps has a family or at least has incurred some level of debt, and who is unable to get work, expected to wait out one or two months, let alone six months with no money coming in – before they receive government help?

    If the unemployed person is truly unable to secure work straight away for whatever reason, they are going to end up relying on credit to bridge the gap until they can either find paid work or become eligible for government assistance. Although the idea of making people wait sounds reasonable as an incentive to get “dole bludgers” off the couch and out in to the workforce, in reality the conditions just don’t seem fair for everyone across the board.

    It brings to mind a survey I featured back in 2012 from Dun & Bradstreet. Their Credit Expectations Survey revealed at the time that a third of low income earners in Australia would only have been able to survive one month without paid work. What if you’re a low income earner, living in an area of high unemployment?

    Furthermore in terms of the housing market – people who go through something like this in their 20’s could be ruined for major credit like a home loan. At best they’ll probably have a credit rap sheet of payday loans and fringe lenders. At worst, they’ll have defaults on their credit file.

    Families saving for a home

    There has also been a significant reduction in the Family Tax Benefit. The Family Tax Benefit Part B threshold has been reduced to $100,000 and will no longer be available after the recipient’s youngest child turns six. The Family Tax Benefit Part A will begin to reduce once the family’s income exceeds $94,316 per year. The School Kids Bonus will also be cut. Having three children is also no longer considered a “large family” with families of four children the cut-off for eligibility for the large family supplement.

    Alongside these cuts, the fuel excise freeze has also gone. This means that fuel prices will rise every six months with inflation.

    First home buyers

    First Home Buyers, already with historically low numbers in Victoria, will have even less incentive to buy a home following this Federal Budget. There are a number of direct and indirect cuts which will impact them. The first is the scrapping of the First Home Savers Account:

    INCENTIVE CUT

    First-home buyers saving for a deposit have lost an incentive with the scrapping of the First Home Savers Account (FHSA) in the Budget.

    The Rudd government initiative, introduced in 2008, provided people saving for a deposit with tax breaks and co-contributions from the government.

    Under the scheme, savers paid concessional tax rates of 15 percent on interest earned in the accounts and the government made a 17 percent co-contribution on the first $6000 contributed each year.

    The government co-contributions to the accounts will end on July 1 and tax and social security concessions will be withdrawn from July 2015.

    Mr Hockey said the accounts were being abolished because their low popularity.

    The Government expects to make $143 million in savings over five years from its scrapping. (news.com.au ‘Federal Budget 2014: Homeowners and the property sector winners’).

    In addition to this, the Government has decided not to review the First Home Owner Grant to keep it relative to house price movements, despite calls from the Real Estate Institute of Australia to do so.

    Price hikes for Universities

    University fees will be de-regulated after 2016 – and this will see a likely increase in University fees across the States. This could also filter through to the first home buyer market. Students will likely come out of their studies with a bigger debt to repay, and less money to save for a home.

     

    There are some key issues for home buyers, particularly first home buyers given their rates are already so low. I believe it will be important to watch how things unfold over time, particularly  how the new unemployment system is working. But for the housing industry, I don’t see this budget as being a big a mortgage ‘killer’ – but let’s hope it doesn’t end up hurting a little.

     

    MyCRA Lawyers is an Incorporate Legal Practice focused on credit consultancy and credit file disputes. MyCRA Lawyers means business when it comes to helping those disadvantaged by credit rating mistakes.

    The above piece is opinion only and does not constitute legal and or financial advice.

    Image: jesadaphorn/www.FreeDigitalPhotos.net

     

  • Beware guarantor loans for desperate first home buyers

    Media Release

    guaranteed loanBeware guarantor loans for desperate first home buyers.

    24 April 2014

    First home buyers desperate to get a foothold in the property market are receiving financial help from Mum and Dad or other family members at increasing rates through family guaranteed loans, but a consumer advocate warns there is no financial benefit for the guarantor, and significant credit rating risks.

    Graham Doessel, Non Legal Director of MyCRA Lawyers, a firm focused on credit disputes, says the difficulties people face entering the property market has sparked an increase in guaranteed loans, where the equity of a property owned by parents or other family is used as collateral.

    But Mr Doessel says many people may not be aware of the significant risks involved in this type of loan, which is being offered in some form by most lenders.

    “Most people don’t know that family guaranteed loans can be dangerous for your credit rating, because your credit history is then linked with the credit rating of your child or other family member, despite having no claim to the property, and little control over the outcome of repayments,” he warns.

    Mr Doessel says in most arrangements, if for some reason repayments are not met, both sides are liable for the debt, and both may be defaulted.

    “Unfortunately the guaranteeing party may not be aware the loan is or was in default until such time as they attempt to take out credit for themselves and are refused,” Mr Doessel says.

    He adds that new repayment history information being recorded on consumer credit files means loan repayments must be made on time or possibly face a ‘late payment’ notation against your name.

    “These late payment notations could impact your ability to get credit for two years,” he says.

    Otto Dargan, director of Home Loan Experts recently explained the rise in guaranteed loans to Mortgage Professional Australia (MPA):

    “Guarantor loans are now the only product that allows a first homebuyer with no deposit to buy a home and as a result, their popularity has increased,” he told MPA.(1)

    A survey conducted last year from ING Direct revealed that 32% of first home buyers in Australia receive financial assistance from family to put their housing finances on a firmer footing.(2)

    “The challenge of getting on the housing ladder has inspired a growing trend for first home buyers to obtain financial assistance in order to get the keys to their first property,” ING stated.

    Mr Doessel says a negative entry on a person’s credit report will mean it is difficult to get credit. He says defaults impact the ability to obtain credit for 5 years. In severe cases of delinquency, the guarantor’s own home is called upon.

    “In cases of significant arrears, the bank begins to use the guarantor’s property to recover lost debts,” he says.

    He suggests parents or family guaranteeing a loan should sit down and ask some tough questions before committing.

    “The most important question anyone contemplating guaranteeing a loan should be asking is ‘could we make the repayments should our child or family member be unable to?’ If in doubt, don’t risk it,” Mr Doessel says.

    He says it is vital to make these considerations:

    1. Seek outside independant and or legal advice prior to any agreement being made.

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

    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 duplicate copy of all bank statements sent during the course of the guarantee. This way, payment problems can be addressed prior to any defaults, while your good credit rating is still intact.

    “Get in and do your research about alternatives to a guaranteed loan before you agree. As a parent or family member you may find you can help your first home buyer in other ways without risking your good credit rating to do it,” Mr Doessel says.

    /ENDS

    Please contact:

    Graham Doessel – Non-Legal Director Ph 07 3124 7133

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

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

    MyCRA Lawyers 246 Stafford Road, STAFFORD QLD. Office Ph: 07 3124 7133

    About MyCRA Lawyers: MyCRA Lawyers is an Incorporated Legal Practice focused on credit file consultancy and credit disputes. MyCRA Lawyers means business when it comes to helping those disadvantaged by credit rating mistakes.

    (1) http://www.homeloanexperts.com.au/wp-content/uploads/2009/09/Otto-MPA-Guarantor-Article.pdf

    (2) http://blog.ingdirect.com.au/2013/01/02/is-housing-expensive-66-of-australians-say-yes/

    Image: Ambro/ www.FreeDigitalPhotos.net

     

  • Credit ‘blemishes’ contribute to first home buyer slump

    Press Release

    bad creditCredit ‘blemishes’ contribute to first home buyer slump

    16 May 2013

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

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

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

    Official Housing Finance figures released by the ABS on Monday show in original terms, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments fell to 14.2% in March 2013 from 14.4% in February 2013 – despite falling interest rates.[fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][i]

    Mr Doessel says there are some credit habits which can reduce any credit rating.

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

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

    “Paying your bills on time should, but doesn’t always guarantee a clear credit file. As credit repairers, we see a multitude of instances where the Credit Provider has made a mistake and put a default or other listing on the consumer’s credit file when it shouldn’t be there,” he explains.

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

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

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

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

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

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

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

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

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

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

    /ENDS.

    Please contact:

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

    Graham Doessel -CEO Ph 3124 7133

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

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

     

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

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

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

  • Could a spike in credit defaults from Gen Y be part of the housing crisis?

    gen yPress Release

    Could a spike in credit defaults from Gen Y be part of the housing crisis?

    13 March 2013

    More of Australia’s new generation of first home buyers are living with credit defaults and a consumer advocate for accurate credit reporting says this could be a contributing factor in Australia’s dim first home buyer figures – with Gen Y facing credit lockdown in increasing numbers.

    According to a recent report from credit reporting agency Veda Advantage, the number of credit defaults amongst Gen Y has grown 5.3% over the past three years to 60% of the share of all credit defaults.

    Veda says Gen Y has the lion’s share of defaults across all account types – telecommunications, credit cards, utilities and personal loans. The biggest pain is telco bills – with Gen Y responsible for 62% of these kinds of defaults, compared to Baby Boomers (13%) and Gen X (22%).[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]

    Figures released yesterday by the Australian Bureau of Statistics confirm first home buyer commitments as a percentage of total owner occupied housing finance commitments fell to 14.9% in December 2012 from 15.8% in November 2012.[ii]

    CEO of MyCRA Credit Rating Repair, Graham Doessel says goals for owning property may be far out of Gen Y’s grasp.

    “The older portion of Gen Y should be collectively entering the property market, but it seems more are suffering with 5 years of credit defaults and unable to even get a mobile phone plan let alone a home loan,” he says.

    Mr Doessel says education and advocacy is the key to helping Gen Y out of the credit crunch as he says they are only a product of the credit environment they were born into.

    “There is a real lack of education around credit issues and credit reporting and this has been a problem for some time. Many Gen Ys had credit thrown at them in their younger years pre -GFC and now they are feeling the ramifications of credit overload.”

    “On the back of this, has been a noted lack of consistency in credit reporting and this has led to a number of inaccurate and unfair credit defaults placed on consumer credit reports. It is high time that consumers and their advocates insist on accurate credit reporting if we are going to have any chance of moving the housing industry forward,” he says.

    Find more information on credit issues and credit defaults on MyCRA’s website www.mycra.com.au.

    /ENDS.

    Please contact:

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

    Ph 07 3124 7133 www.mycra.com.au www.mycra.com.au/blog

    MyCRA Credit Repair 246 Stafford Rd, STAFFORD Qld

    MyCRA is Australia’s number one in credit rating repairs. We permanently remove defaults from credit files. CEO of MyCRA Graham Doessel is a frequent consumer spokesperson for credit reporting issues and is a founding member of the Credit Repair Industry Association of Australasia.

     

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

    [ii] http://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/5609.0Main%20Features2Dec%202012?opendocument&tabname=Summary&prodno=5609.0&issue=Dec%202012&num=&view=

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

  • First Home Buyer Figures Take a Dip: ABS Housing Finance October 2012

    After the promising figures from August and September’s Housing Finance Statistics which seemed to indicate First Home Buyers were making their way back to the market – figures from October record a drop. Is the recent interest rate cut going to be enough to tempt First Home Buyers back to the housing market – or are we out for the near future? What does this mean for those people with bad credit?

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

    OCTOBER KEY POINTS

    VALUE OF DWELLING COMMITMENTS

    October 2012 compared with September 2012:

     The trend estimate for the total value of dwelling finance commitments excluding alterations and additions rose 1.1%. Investment housing commitments rose 2.2% and owner occupied housing commitments rose 0.5%.

     In seasonally adjusted terms, the total value of dwelling finance commitments excluding alterations and additions rose 1.8%.
    NUMBER OF DWELLING COMMITMENTS

    October 2012 compared with September 2012:

     In trend terms, the number of commitments for owner occupied housing finance rose 0.6%.

     In trend terms, the number of commitments for the purchase of new dwellings rose 4.0%, the number of commitments for the purchase of established dwellings rose 0.5%, while the number of commitments for the construction of dwellings fell 0.9%.

     In original terms, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments fell to 18.7% in October 2012 from 19.4% in September 2012.

    With experts predicting a rise of at least 3%, October’s rise of only 0.1% has meant many are predicting further cuts will be needed. The RBA cut the cash rate to three per cent at its December board meeting last week.

    Australian Broker reports more on this:

    “The Reserve Bank is relying on the housing sector to pick up in 2013, following an expected peak in mining investment. But economists are now saying they may need to cut the cash rate further in order to stimulate growth the housing sector,” their recent story said.

    Macquarie chief economist Richard Gibbs said weakness in the number of home loans indicated a continued lack of confidence among would-be homeowners.

    “This data is a lot more spotty than we had expected,” he was reported as saying in Business Spectator yesterday.

    “While the value of lending commitments is up, the number of loans remains weak, reflecting a wider lack of consumer confidence in Australia.”

    However, investors seem more confident with the market – the value of investment home loans rose 14 per cent over September and October.

    CommSec chief economist Craig James said in Business Spectator there were a number of factors boosting investor confidence – reportedly the strongest back-to-back gains in more than five years.

    “Investors conclude that migration is rising, rental markets are tight and home prices are rising – a compelling mix of factors pointing to higher property returns,” he said.

    Buyer confidence and bad credit

    When lending criteria is tight, what happens to people who have bad credit? When they are refused a mainstream loan because of bad credit, but market confidence is high – when it is moving up – they may want to get into a loan at a higher interest rate in order to take advantage of an increasing market. This comes at a price though – a whopping $15,046.57 or more in additional home loan repayments over the first three years of their loan. But if the market is going up rapidly – they may see it as a viable option.

    When confidence is low, when the market is static, they may not be so keen – they may simply choose not to buy.

    Some reports suggest as many as 3 million Australians are living with bad credit. How many of these people would like to buy a home in the next 5 years? Many of the people that currently have negative listings on their credit file may be living with bad credit history unnecessarily. Rather than miss the opportunity to buy because there is no urgency to buy, because they would rather save that $15,000 – there is another option – to actually assess whether they would be suitable to repair their credit rating.

    To find out how more people can remove their bad credit history – opening doors to lenders that were previously unavailable – contact MyCRA Credit Rating Repair.

    Click on the link to this short video to find out how a professional credit repairer can help you or if you are a broker, your clients:

    Image: Idea go/ www.FreeDigitalPhotos.net

     

     

  • First Home Buyers Dive in Again But Will They Stay In the Water?

    Most agree that First Home Buyers are the key to the Australian housing market. How are they doing? Are they being attracted by the current market conditions? Or are they even able to dip a toe in with the current lending criteria forcing them to save for years just to get up enough deposit? We look at the factors impacting first home buyers – and why those buyers who present with a good income and a good deposit but bad credit can be saved.

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

    Last week AFG announced it had had its strongest July in 5 years…thanks to first home buyers.

    AFG told Australian Broker a “powerful cocktail of incentives” has helped them to process the highest amount of mortgages in July since 2007 – totalling $2.7 b.

    They report the percentage of first-home buyers has climbed to 17.3%.

    “Low interest rates, soft property prices and escalating rents create a powerful cocktail of incentives to get people into the property market,” said AFG’s general manager of sales and operations, Mark Hewitt.

    Is an improving housing market a reality? Or perhaps – as some experts have touted – simply the result of skewed indicators due to the June ending of government incentives in some States?

    Westpac senior economist Matthew Hassan told the Financial Review last week that there were “consistent” indicators from various sources to the “beginning of a stabilisation in prices”.

    But he said it was too early to call a definite improvement. He pointed to the end of various state government home-buyer incentives in June, which had pulled forward demand and artificially inflated buying activity.

    Let’s hope house prices are stabilising, and more and more first home buyers have the confidence (and money) to enter the market again.

    So if you, as a broker are in the right market to see a resurgence of first home buyer activity, what are the factors impacting credit decisions?

    An article in The Australian recently, reported that an average couple will need to save for at least five years to reach the amount required for a first home deposit.

    The study by financial comparison company Rate City shows a first home buyer would take five years and seven months to save a 10 per cent deposit of $30,667 for a mortgage size of $276,000.

    And a dual income couple with a mortgage capacity of $540,000 would take more than five-and-a-half years to save a 10 per cent deposit of $60,000…

    A 10 per cent deposit is now the minimum amount required by many lenders, while many banks want at least a 20 per cent deposit before they relax their requirements for mortgage insurance.

    Rate City found it would take a first home buyer 13 years to save the recommended 20 per cent deposit plus $10,000 for fees.

    These people that have saved for 5 to 10 years to be able to buy a home in their area have got to be dedicated. This commitment to frugality is often undermined at the time of finance application by a little thing called the credit file. Well, actually it’s a big thing. The lending criteria for risk-management as it relates to the credit check has changed post-GFC just as the deposit and savings requirements have.

    So how can it be fair that someone who has scrimped and saved for 5 years to get the deposit together can be refused the pot at the end of the rainbow, purely on the say-so of, say a Telco company whose listing may or may not be lawful?

    And how can it be fair that a broker must turn these savers away? Or put them into a loan with a non-conforming lender at high interest rates which sees them struggle just to make ends meet every month?

    These questions often come back with a few different responses from brokers who don’t know about or use the services of professional credit repair firms…

    1. Yes, but if they have done the wrong thing and not paid their credit – they shouldn’t be given any more.

    2. If their listing is not lawful, they should take it up with the creditor before they come and see their broker.

    3. They can refinance the non-conforming loan and get into a standard loan after a few years.

    4. Exactly, I see clients like this, but unfortunately if they have bad credit for whatever reason, they are just not getting a mainstream loan. You can’t remove bad credit until the listing drops off. Don’t touch those clients.

    So what is the reality of bad credit clients? Let’s answer those 4 statements…

    1. If people have done the wrong thing and not paid their credit, they shouldn’t be given any more – it’s true. But what exactly is “the wrong thing?” Moved house and had bills come to their old address despite contacting the creditor to change their details? Had a dispute with a creditor that they thought was resolved? Been the victim of a creditor’s mistake? Had a period of temporary financial hardship which was ignored by the creditor? These are very common scenarios as to why the credit listing is deemed unfair. Often this is reason to request the listings removal from the client’s credit file.

    2. Clients often don’t know they have bad credit until they apply for a home loan. Then often when they attempt to dispute the listing with their creditor themselves, they have little success. There is a host of legislation which must be adhered to when placing listings on credit files. It is the legislation that creditors can hide behind when consumers come to them to dispute their credit listing. Consumers just need someone on their side who is equally knowledgeable in credit reporting and industry legislation, and with the ability to negotiate on their behalf to remove anything which is demonstrated to be unlawfully listed.

    3. Clients could enter into a non-conforming loan for a few years, and sometimes this is the only choice. But it is so much extra money in interest. On an average non-conforming loan of $300,000, the client will pay $15, 046.57 extra at 9% as opposed to a standard rate of 7%. (The cost of employing the services of a credit repairer to restore the good credit rating is miniscule when compared with this). If they are able to remove the bad credit, then they can be sent back to their broker to enter into mainstream credit, and save themselves thousands.

    4. Despite what creditors tell consumers, bad credit can be removed if it is unlawful. There are a host of reasons why it may be unlawful – and credit rating errors are more common than most people think. It has been reported in the past through a study by the Australian Consumer Association (now Choice) that as many as 34% of people surveyed had credit files which contained errors of some kind.

    The solution is, to refer the client to a professional credit repair firm once you find out their credit file is tarnished. They can do the work to repair the credit file whilst keeping in touch with you on their progress. The client can be sent back to you once their credit file has been repaired. You can have the best loan for them lined up and ready to go.

    Talk to a Credit Repair Advisor at MyCRA Credit Rating Repairs on 1300 667 218 if you think we can help you save more bad credit clients.

    Image: jannoon028/ www.FreeDigitalPhotos.net

  • How You Can Give Yourself the Best Chance of Being Approved For Your First Home

    A great deposit and a great income is not enough to ensure you get the home loan that’s right for you. We show you how your credit rating can have just as much impact as your savings record and show you the steps you can take to ensure your credit file accurately reflects your ability to repay a home loan.

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

    There is more to applying for finance than wages and savings records. One of the key factors to home loan approval is your credit report.

    What is a credit report?

    A credit report is a report on your credit file status (or credit rating), held by one or more of Australia’s credit reporting agencies.  Your credit file is checked by the lender when you apply for a home loan. It contains all of your personally identifiable information as well as your repayment history, and is used to assess both the amount you are able to borrow and your ability to repay the loan.

    Anyone who has borrowed money, or has established an account for services is credit active and will have a file in their name. This includes mobile phone plans, accounts with utility companies, rates accounts and of course loans of any kind.

    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 defaults and even too many credit enquiries or applications for credit may be considered to be tarnishes on your credit rating.

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

    If you are unsure what is on your credit file, it would be worth taking the time to find out.

    There are three major credit reporting agencies in Australia: Veda Advantage – which holds the credit file of over 16 million Australians, Dun and Bradstreet and Tasmanian Collection Service.

    You can write to or email one of these agencies and request a copy of your file.  If you are not in a hurry there is no charge to you but it will take 10 working days from application to receive this information.

    What many people do not realise, is how easy it is to have a default slapped on their credit file.  If you fall into arrears on your account for more than 60 days (including rates, power and mobile phones) then the credit provider has the right to notify you of their intention to record this default against you on your credit file. Even if this bill is later paid, this ‘paid’ default still remains on your record for 5 years.

    Will I always know I have bad credit?

    NO! This is one of the key things we want all home buyers to know. Mistakes can and do happen, and it may not be until you are sitting in front of the bank getting rejected for a home loan that you find out you have bad credit history.

    There are a great number of credit files which contain errors or listings on credit files which shouldn’t be there, so even if you think you have never paid a bill late, you may still have a bad credit rating. It is always worth taking the time to find out before you apply for a home loan.

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

    If you discover you have an adverse listing or ‘bad credit rating’, you will find it very difficult to find a home loan with a mainstream lender. Generally this problem will keep occurring for the 5 years the default is on your credit file. If you decide to enter a non-conforming loan, you may be up for tens of thousands more in interest repayments just over the first three years of the loan.

    What can I do to fix my bad credit rating?

    Once you have obtained a report there are three things to consider:

    1. Check the accuracy of the report. If there are errors, be aware you do have the right to have errors rectified.  Likewise, if there are numerous strange defaults and or applications for credit that you don’t recognise – you would need to immediately investigate these and notify Police in case of identity fraud.

    2. Check you were informed of any intention to list. Current legislation requires you to have been informed in writing of any intention from creditors to list you as a defaulting on credit.

    3. Check the fairness of the listing. Only serious credit infringements should be recorded, or overdue bills in which 60 days have elapsed since payment was due.

    How does a credit repairer work to repair my credit rating?

    In many cases where people have attempted to dispute or 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 not be sufficient to ensure credit is obtained with most lenders.

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

    The 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. We will also look at any other extenuating circumstances to determine if there is an avenue we can investigate which results in having the listing removed.

    Should I try to cut out all credit from now on?

    Credit is not all bad.  In fact, not having ever taken out credit can harm your chances of obtaining a home loan just as much as having a bad credit rating.

    However, we do advise you to be cautious with credit. Start small, for instance a mobile phone plan or store credit card and repay the account on time, every time.

    What can I do to maintain a good credit rating?

    1. Make all payments on time. This is the easiest way to ensure there are no discrepancies or defaults on your credit file.
    If you are unable to make a payment on time, contact the creditor. They may be able to set up a payment plan for you until you get back on your feet. Soon overdue accounts that are as little as one day late will be recorded on your credit file as ‘overdue payments’ and will stay there for 2 years, so it is important to repay on time, every time to avoid bad credit.

    2. Regularly obtain a copy of your credit file – once a year is recommended and this is free in Australia annually.

    3. Keep credit card limits within a set budget. Don’t be tempted to accept the sky high limits some banks offer as it could encourage you to spend needlessly and blow out your budget. A lower credit limit is also better when lenders are assessing your ability to repay a loan.

    5. Be aware of excessive credit enquiries. If you are not sure about your credit health, get it checked before applying for new credit so as not to rack up unnecessary credit enquiries. You do not record a credit enquiry when you enquire about your own credit file. Also, ensure you do not apply for credit all over town – and beware of filling any forms out online.  You should only apply for credit you have full intention of pursuing. Every application for credit will be noted on your file, but it does not say whether the application was approved or declined. It could look to creditors like you have been declined multiple times.Too many credit applications on a person’s file can hinder their chances of obtaining a loan. Some lenders are rejecting loans for as little as two enquiries in 30 days, or six enquiries within the year.

    For help repairing your bad credit, contact MyCRA Credit Rating Repairs today 1300 667 218 or see more information here:

     

    Image: annakml/ www.FreeDigitalPhotos.net

  • NCCP class action is passing the buck

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  • First home buyers missing key step to finance approval

    Media Release

    23 November 2011

    First home buyers are dipping their feet into the market again – a drop in interest rates and reduced property prices renewing buyer confidence for the first time in two years, but many are missing one vital check to ensure they are finance-ready, the credit check.

    The Australian Bureau of Statistic’s housing finance figures for September show the number of first home buyers, as a percentage of total owner occupied housing commitments increased to 16.4 per cent compared to 15.4 per cent in August.

    The Real Estate Institute of Australia says although the first home buyer proportion is well below the long-run average of 20.1 per cent, it indicates a modest return of first home buyers to the market.

    “The latest figures show that buyers are gradually returning to the market and we should expect modest increases to continue after the decision on interest rates in November which has made housing more affordable for first home buyers,” concluded REIA Acting President, Pamela Bennett.

    First home buyers wishing to take advantage of more affordable conditions need to know there is more to applying for finance than wages and savings records.

    Director of MyCRA Credit Repairs, Graham Doessel says a borrower’s credit file is one of the key factors to home loan approval, and anyone applying for a home loan should obtain a credit report prior to making a finance application, regardless of whether they think they have a good credit rating or not.

    “There are a great number of credit files which contain errors or which shouldn’t be there, and first home buyers need to know any negative listing will stop them from getting a home loan in this market, or force them into a high-interest loan, potentially costing them a staggering $22,000  more in interest over the first 3 years,” he says.*

    The term of a negative listing is between 5 and 7 years, depending on the type and can include black marks from telecommunications and electricity providers as well as banks and finance companies.

    The most common type of listing is a default, which is recorded if an account is in arrears past 60 days. According to Mr Doessel, defaults from telecommunications providers which are listed in error make up a big part of his clientele.

    “As many as 50 per cent of our clients seek credit repair due to bill disputes and internal errors from Telcos that have seen them black listed from credit and unable to get a home loan,” he says.

    He says it doesn’t need to be a big default to be a big detriment to a person’s loan application.

    “Some defaults for unpaid accounts of $300 can stop borrowers from getting a home loan. Lenders are even rejecting loans for too many credit enquiries, such as two enquiries within thirty days or six within the year,” he says.

    House hunters can obtain a copy of their credit file for free every year from one or more of the credit reporting agencies in Australia, and this file will provide details on any negative listings such as defaults, writs and Judgments which may have been placed against their name by creditors.

    When disputing a negative listing, it is up to the credit file holder to provide reason as to why the creditor has not complied with legislation.

    “Unfortunately many people find this process difficult – negotiating with creditors is not always easy for the individual to undertake.  Our job as credit repairers is to check the process of listing defaults for legislative and or compliance errors, any such errors could deem the credit file default listing unlawful, at which time we advise the creditor to remove the default,” he says.

    /ENDS.

    Please contact:

    Lisa Brewster – media@mycra.com.au

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

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

    Links:

    http://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/5609.0Main20Features2Sep%202011 opendocument&tabname=Summary&prodno=5609.0&issue=Sep%202011&num=&view=

    http://www.reia.com.au/userfiles/MEDIARELEASE_1320968493.pdf

    * $22,867.15. Based on average loan of $400,000 over 30 years on non-conforming
    loan interest rate of 95.% vs standard variable rate of 7 %.(http://www.mycra.com.au/calculators/do-i-need-credit-repair.php)

    Image: photostock/ FreeDigitalPhotos.net

  • September Lending Finance Statistics, ABS

     

    The Australian Bureau of Statistics released its September Lending Finance figures today – showing a continued small percentage rise in finance numbers.

     

    SEPTEMBER KEY POINTS

     

    SEPTEMBER 2011 COMPARED WITH AUGUST 2011:

    HOUSING FINANCE FOR OWNER OCCUPATION

     The total value of owner occupied housing commitments excluding alterations and additions rose 0.8% in trend terms and the seasonally adjusted series rose 0.7%.

    PERSONAL FINANCE

     The trend series for the value of total personal finance commitments rose 0.2%. Fixed lending commitments rose 0.6%, while revolving credit commitments fell 0.3%.
     The seasonally adjusted series for the value of total personal finance commitments fell 2.5%. Revolving credit commitments fell 7.3%, while fixed lending commitments rose 1.7%.

    COMMERCIAL FINANCE

     The trend series for the value of total commercial finance commitments rose 0.3%. Revolving credit commitments rose 0.6% and fixed lending commitments rose 0.1%.
     The seasonally adjusted series for the value of total commercial finance commitments fell 10.0% in September 2011, after a 7.7% rise in August 2011. Revolving credit commitments fell 15.3%, after a 6.2% rise in the previous month. Fixed lending commitments fell 7.3%, after an 8.5% rise in the previous month.

    LEASE FINANCE

     The trend series for the value of total lease finance commitments rose 0.6% and the seasonally adjusted series rose 1.3%.

     
    FIRST HOME BUYERS RE-ENTER MARKET

    The Real Institute of Australian announced last week that housing first home buyers are dipping their feet into the market again – a drop in interest rates and reduced property prices renewing buyer confidence for the first time in two years.

    REIA housing figures for September show the number of first home buyers, as a percentage of total owner occupied housing commitments increased to 16.4 per cent compared to 15.4 per cent in August.

    The REIA says although this proportion is well below the long-run average of 20.1 per cent, it indicates a modest return of first home buyers to the market.

    “The latest figures show that buyers are gradually returning to the market and we should expect modest increases to continue after the decision on interest rates in November which has made housing more affordable for first home buyers,” concluded REIA Acting President, Pamela Bennett.

    First home buyers wishing to take advantage of more affordable conditions need to know there is more to applying for finance than wages and savings records. Many will neglect one vital check which may mean their finance application is rejected.

    Anyone applying for a home loan should obtain a credit report prior to making a finance application, regardless of whether they think they have a good credit rating or not.

    The last survey on errors within credit files was conducted by the Australian Consumer Association (now Choice magazine) in 2004. The study found that 34% of the credit files of those surveyed potentially contained errors of some kind.

    “In our view, there are serious, systemic flaws which are leaving an increasing number of Australian consumers vulnerable to defamation, mis-matching and harassment,” the report said.
    The possible volume of errors on credit files means every buyer should make obtaining a credit report one of the first steps to securing a home loan.

    Buyers can obtain a credit report for free every year, but most don’t know it.

    They are also seldom aware that if they find defaults, writs or Judgments which they believe have errors, are unjust or are completely innacurate, they have the right to have them removed. This is possible in a number of ways, but for most people who are time poor or not familiar with credit reporting legislation, they can contact a credit rating repairer to do the job for them.

    To request a credit file check or have existing errors repaired, contact MyCRA Credit Repairs on 1300 667 218 or visit our website www.mycra.com.au for more information.

    Image: Idea go/FreeDigitalPhotos.net