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

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

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

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

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

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

What is professional credit repair?

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

How have professional credit repairers come about?

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

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

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

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

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

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

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

What are credit rating errors?

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

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

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

Credit rating errors could be anything from

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

Is credit repair legal?

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

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

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

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

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

What’s the process to fix my bad credit?

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

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

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

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

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

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

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

How long will it take to fix my bad credit?

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

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

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

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

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

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

Images: Stuart Miles/ www.FreeDigitalPhotos.net

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