MyCRA Specialist Credit Repair Lawyers

Tag: interest rate cuts

  • Interest rates cut to record lows at 2.5%

    interest rate cutsThe Reserve Bank of Australia has cut its cash rate to a low 2.5% – lower than during the GFC. The Sydney Morning Herald says several banks wasted no time in passing on the rates cut to their home loan customers. National Australia Bank and Bank of Queensland said they would both pass on today’s 0.25 percentage point cut in interest rates to the home loan customers in full. This is good news for home buyers with a good deposit and a good clean credit file – but maybe not such great news in the long term for the Australian economy.

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

    As Australian Broker reported today, the speech made late last week by RBA governor, Glenn Stevens, also indicated another rate reduction was on the cards, with Stevens admitting the RBA was becoming increasingly concerned about major areas of the Australian economy, particularly the passing of  mining and credit growth ‘booms’.

    Many brokers will be taking this information straight to clients, as 1st Street Home Loans founding director, Jeremy Fisher, outlined in an interview with Australian Broker earlier today.

    “First and foremost, we’ll get in touch with any clients that are due to settle and looking at making any necessary changes to their loans. And then we’ll go back and review any clients that are, I guess, a ‘watchlist’. So it’s pretty much just keeping our clients informed of the change.”

    Fisher said 1st Street sends out a bulletin to all their clients immediately following RBA cash rate announcements in order to keep them updated.

    “Then we just go back to our watchlist and touch base with everyone that’s kind of doing things as we speak – because that may or may not influence what they’re doing.”

    Mr Stevens told the Sydney Morning Herald he expected the Australian economy to continue to grow below trend in the near term as mining investment falls, and for inflation to remain consistent with the medium-term target as labour costs moderated.

    He added that the Australian dollar remained “at a high level” despite losing about 15 per cent of its value since early April, and welcomed a further depreciation of the exchange rate to help foster a rebalancing of growth in the economy.

    Several analysts said the RBA could ease rates again later this year as the country continues to grapple with a slowing economy amid an uneven transition away from mining-led growth.

    Taking advantage of interest rate cuts.

    With this interest rate cut, we feel it is worthwhile to ramp up our education efforts around credit history. Many people do not know what a credit file is – many more don’t know the process for being listed with bad credit, and more again assume that if there was something amiss with their credit file, that they would somehow be informed. They don’t realise that the onus is on them to check their credit history on a regular basis (at least once per year) just to make sure that errors have not been made on the credit file. Errors can happen to anyone – from all walks of life.

    People may believe their credit history is clean, but creditors can and do make mistakes with credit reports, and often it is not until people apply for finance that they have any idea they have bad credit. At this time the process of investigation and complaint can be stressful and can sometimes mean the prospective borrower misses out on the home loan while the discrepancy is addressed.

    The process of clearing an unfair credit listing can sometimes be very time consuming – especially if the creditor has not cooperated with requests to supply documentation in a timely fashion, or the matter has to be referred to a third party for investigation.

    So the message is, if people are thinking about buying a home in the near future – they should check their credit report first, and make sure it has the “all clear” before they apply for finance, and before they get their hearts set on any particular home. This is free for all credit active Australians once every year and we encourage any home buyer to request a copy of their credit report. It takes 10 working days or for a fee to the credit reporting agency, it can be sent urgently. But what it does is give peace of mind – not only to the Purchaser, but to the Broker or Bank Manager, and in some cases a clear credit file can help get the deal over the line with the Agent and Seller.

    If there are any inconsistencies or out and out errors on the credit file, the advantage to getting those removed is generally thousands and thousands of dollars in interest saved by being able to take advantage of those interest rate cuts with the mainstream lender of the buyer’s choice.

    To find out more about the benefits of using a credit rating repairer to dispute credit listings, contact a Credit Repair Advisor at MyCRA Credit Rating Repairs on 1300 667 218 or visit the main site for more information www.mycra.com.au.

    Image: renjith krishnan/ www.FreeDigitalPhotos.net

  • Home owners with credit file defaults forking out $15,000 more in interest

    Australians who are living with defaults on their credit file could potentially be hit with a whopping $15,046.57 or more in additional home loan repayments over the first three years of their loan if they are lucky enough to get one.

    Although this week’s predicted 0.25 per cent interest rate cut did not occur, each previous one had the potential to pass on a saving of around $50 per month to the average householder for a mortgage of $300,000 if the full amount was passed on.

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

    But for those Australians who are living with credit rating defaults, last year’s interest rates cuts, and any which are predicted in the near future will be negligible.

    Our calculations show families with a $300,000 loan who are unlucky to have defaults on their credit file for 5 years, who are able to secure a loan with a non-conforming lender will be paying a staggering $417.96 more per month in interest rates.

    We talk about massive savings for the average Australian with these cuts, we talk about encouraging people to switch lenders, but this is not a reality for people with defaults. Most banks won’t lend them money, forcing them into non-conforming loans and paying top dollar because their credit file shows they are a bad risk – and it may not be true.

    It is a fact in our experience that there are many families living with unfair defaults.

    It is not known for sure how many of the over 14 million credit files in Australia could contain errors or inconsistencies.

    The possible volume of errors on Australian credit files was exposed by a small scale study conducted in 2004 by the Australian Consumer Association (now Choice Magazine). It revealed about 30% of credit files were likely to contain errors.

    “In our view, there are serious, systematic flaws which are leaving an increasing number of Australian consumers vulnerable to defamation, mis-matching and harassment,” the ACA report said.

    Transferring those figures from the Choice study to the number of credit files in Australia today, could take the figures to over 4  million errors, inconsistencies or flaws.

    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.

    We feel based on the ACA study and the Choice survey that the real figure across the board is likely to be in the middle somewhere – much higher than 1%. With 14.6 million Australian Veda Advantage credit files alone 1 per cent of errors amounts to 140,000 Australians’ financial lives potentially in ruins through no fault of their own.

    Under current credit reporting legislation, it is up to the consumer to check for errors. Credit file holders are able to obtain a copy of their credit report from one or more of Australia’s credit reporting agencies for free every 12 months.

    Unfortunately consumers are often not aware across the board of their responsibility to check the accuracy of their own credit file, so many errors go undetected.

    Errors do occur, but often it is not until people apply for a loan that they learn they have an adverse listing on their credit file, but by then it is too late to correct errors and they are generally refused credit or forced to take on non-conforming loans at sky-high interest rates to secure the home.

    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.

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

    If you want a home loan, or to re-finance, but are weighed down by credit rating defaults, contact us to see how we can repair credit fast.

    Image: renjith krishnan / FreeDigitalPhotos.net

    Image: digitalart / FreeDigitalPhotos.net