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  • Access to credit will fall with introduction of new credit reporting data – and it’s being collected now

    Press Release

    default listingAccess to credit will fall with introduction of new credit reporting data – and it’s being collected now.

    27 June 2013

    Credit numbers are expected to decline when more data is reported about Australian credit habits in March next year, and a consumer advocate for accurate credit reporting warns, some simple mistakes may mean it is your credit worthiness on the line.

    CEO of MyCRA Credit Rating Repair, Graham Doessel says this is an important time to know about Australia’s credit laws, and to be careful with how you use and repay credit.

    “Australian consumers are currently under the microscope with their repayments, and if they are more than five days late with their repayments to licenced Credit Providers, that is going on their credit record now for two years and will show up as of March next year,” Mr Doessel advises.

    “In my opinion, this is going to trip up many Australians. With only a 5 day grace period proposed, it may mean many Australians are unnecessarily banned from credit due to simple billing mistakes, lost paperwork and other payment mishaps,” he says.

    The prediction of reduced credit numbers has been echoed by Dun & Bradstreet CEO, Steve Brown at a recent Australian Banking and Finance Conference.

    Publication Banking Day reported Mr Brown as telling the conference that a contraction in consumer credit will take place following the introduction of comprehensive reporting in March.

    “Lenders will start to learn things about consumers that they did not know before, such as the number of late payments they make,” Brown says.

    And so say Citigroup.

    “Citigroup Australia’s country risk director for consumer, CLN Murthy, agreed that there would be a tendency to reduce credit limits after comprehensive credit reporting came in,” Banking Day reports.

    Repayment information will be part of five new data sets to show up on your credit report as part of wide-sweeping amendments to Australia’s Privacy Act, which includes a new Credit Reporting Code of Conduct.

    “Prospective lenders will be privy to your repayment habits – and the word is out that more and more information may be on the table going forward,” Mr Doessel warns.

    Banking Day recently reported that Mr Brown and others in the consumer finance industry will be pushing for even more data to be included in the future.

    “Brown said Dun & Bradstreet would like to see the inclusion of account balance data in credit files,” Banking Day reports.

    The long term plans with respect to repayment history information is to be able to offset good repayment history against a default listing. The conference predicted that products and pricing structures could be developed for these borrowers.

    In the meantime, Mr Doessel says there are some simple things credit-active Australians can do to make sure their credit-worthiness remains in-tact:

    1. Pay on time, every time. Pay within five days of your bill’s due date to avoid a late payment notation. It doesn’t have to be a big amount to impact you. Too many late payment notations will probably mean you’re refused credit, or offered only a high interest rate.  

    2. If you can’t pay, actively seek help. There are new laws to help prevent you from being defaulted if you are under financial hardship, provided you get in early with your Credit Provider. So there is a new incentive to get in and work it out prior to letting your accounts go into arrears and copping a default listing.

    3. Seek cautions credit limits. If you’re not using it, don’t have it is the general adage. If you take out a credit card or other line of credit, it’s probably not wise to opt for a lofty limit, but ask for an amount closer to what you intend to use.

    4. Consider identity theft risks. Understand how lucrative your personal information is and take steps to keep abreast of how it can be at risk. New laws will allow you to place a ban period on your credit information if you believe you may be at risk of identity theft. Acting quickly may prevent credit file misuse.

    5. Check your credit file regularly. With the new information available, it will be more important than ever to check your credit file. Many people don’t know you can do this for free annually through the Australia’s credit reporting agencies and a copy is sent within 10 working days.

    6. Correct credit information which you believe is inaccurate, inconsistent or unfair. To offset the new information, new laws will make it fairer for those disadvantaged individuals to access and correct their credit report.

    But Mr Doessel says there will still be a requirement to work within and have knowledge of credit reporting law when disputing an inaccurate or unfair credit listing.

    “It is important to note, that Credit Providers and Ombudsman must act impartially and cannot advocate for you,” he warns.

    He says you can start by contacting your Credit Provider yourself to alter incorrect information, or you can put your case for dispute in the hands of an advocate.

    “You should take steps to rectify mistakes before the information has any bearing on a credit application you may make in the future,” Mr Doessel says.

    “You should take steps to rectify mistakes before the information has any bearing on a credit application you may make in the future,” Mr Doessel says.

    /ENDS.

    Please contact:

    Graham Doessel – CEO Ph 3124 7133

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

    Ph 07 3124 7133 www.mycra.com.auwww.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.

    Image: Victor Habbick/ www.FreeDigtalPhotos.net

     

     

  • Small business finance regulation deferred

    small business financeIt seems the controversial draft legislation regulating small business finance has been deferred – with the Government now saying it wants to take the time to get reforms right. This follows a barrage of criticisms from business groups that the new laws would make it much harder for small businesses to get funding.

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

    The Government’s Christmas ‘surprise’ for small businesses in the form of draft legislation to regulate commercial lending certainly met some criticism in the lending and small business sector.

    The legislation proposed prohibiting people from “engaging in credit activities” in relation to a small business credit contract or a small business consumer lease unless they hold a permit.

    Business publication SmartCompany confirmed last week in the story ‘Government backflips on plans to regulate access to credit for small business‘ that Treasury will put off any action on small business finance.  T

    hey said Financial Services Minister Bill Shorten announced the withdrawal of the draft legislation at a meeting with the Council of Small Business of Australia and the Commercial Asset Finance Brokers Association of Australia last week.

    It was also reported in Australian Broker today in the story ‘Commercial lending off the table…for now’ that Treasury indicated that its consultations had found “a need to further examine a number of key issues” relating to business credit.

    “Treasury’s release said that the Government considers that it is important to get the reforms right, given the important role that small businesses play in the Australian economy,” Gadens Lawyers partner Jon Denovan told AB.

    The CAFBA said in a statement that the government’s move to dump the draft legislation was a common sense result.

     “CAFBA maintained staunch resistance to all aspects of the draft regulation and was unwilling to accept or compromise its position, as CAFBA fully understood the debilitating impact of the proposed regulation and the flow-on effects to every small business in Australia,” it was reported in SmartCompany.

    This was our position on the draft legislation when it was released just days before Christmas:

    CEO of MyCRA Credit Rating Repair, Graham Doessel says the proposed changes would be widely criticised by small business advocates as stifling the flow of business credit in Australia and that the changes are unnecessary form of “hand holding” for Australian business owners.

    “Australian small businesses are already doing it tough getting credit out there post GFC – this is going to mean they will struggle even further to expand and there will be less start-ups,” Mr Doessel says.

    Where we did want to see change, was in the basic rights afford to commercial credit file holders before recovery is commenced.

    In the consumer landscape, if an account is overdue, then the account holder is afforded a 30 day right to remedy under the Credit Reporting Code of Conduct. This is meant to ensure that fair and reasonable means have been taken to attempt to recover the outstanding amount before further action is taken, and before the consumer’s credit file is defaulted.

    As commercial credit is not covered under the Code, this right is currently not provided to commercial credit file holders.

    The common courtesies which consumers are afforded and which many assume stay with them in the commercial sphere just don’t apply – many don’t realise just how big a risk commercial credit is.

    Here’s more from our media statement:

    “It’s like the ‘wild, wild west’ out there with some lenders defaulting small businesses with little to no warning.”

    Once a default is placed on a commercial credit file, then the length of time it remains on the credit file is legislated by the Privacy Act 1988.

    “A commercial credit file holder is still subject to 5 years of bad credit if they end up with a default listing, the ramifications are still the same – they are generally refused mainstream credit, refused mobile phone plans, car finance and credit cards – but the rules for how the default gets there in the first place are just not there,” Mr Doessel says.

    “In theory, you can be one or two days late in paying a commercial account and you can have your ability to obtain credit ruined. There is no right of redress, as there is no legislation governing notification requirements in the commercial credit sphere.”

    Mr Doessel says the Government has completely missed the mark on what small businesses need to thrive and survive.

    “Most don’t need restrictions on available credit, they just need the basic credit reporting rights that they deserve,” he says.

    We’re glad the Government has put this legislation on the backburner, but still hope at some stage commercial credit reporting will be reassessed.

    Image: franky242/ www.FreeDigitalPhotos.net