MyCRA Specialist Credit Repair Lawyers

Tag: professional credit repairer

  • Churning – who says it’s bad?

    Press Release

    churningChurning – who says it’s bad?

    12 April 2013

    Churning for self interest is without question a highly unethical practice for a broker to perform, but a consumer advocate says when it comes to expensive credit, there can be such a thing as an ethical churn.

    CEO of MyCRA Credit Rating Repair, Graham Doessel says for clients who are currently sitting in a high interest loan, there are potentially tens of thousands of dollars which can be saved by their broker turning their loan over to mainstream credit, and he says it can happen easier than many brokers think.

    “It is often thought that if a client has bad credit, it is meant to be there, when in reality mistakes are extremely prevalent in credit reporting but it has in the past been difficult for individuals to make a case to dispute their credit listing,” Mr Doessel says.

    Traditionally clients with bad credit are steered by brokers towards the non-conforming loan market – but Mr Doessel argues they should first be given the right to have their credit listings assessed for compliance with current law.

    “A professional credit repairer will conduct an audit-like investigation on the client’s credit file – and in most cases there are compliance issues or out and out mistakes which can see the listing proven unlawful and be required to be removed from the credit file,” he says.

    He says this practice has seen his clients save thousands of dollars just in interest alone on a home loan.

    Comparison Table $400,000 loan over 30 years

    Repayment time frame Min. repayment on interest rate 10.5% Min. repayment on interest rate 6% Difference in interest paid.
    Monthly $ 3,658.96 $ 2,398.20 $ 1,260.76 
    Weekly $ 843.97 $ 553.05 $ 290.92 
    Yearly  $43,907.52 $28,778.40 $15,129.12

    Over an average three-year period in a non-conforming home loan a client with a $400,000 loan could be paying over $45,000 extra in interest.

    Mr Doessel says in these instances it is not only ethical for brokers to churn their clients, but they almost have an obligation to do so.

    “When we consider these figures, brokers are almost ethically obligated to ensure that no clients are paying this extra interest unnecessarily – which could involve going back through client databases and uncovering some of the basic circumstances surrounding the bad credit, or even more basically – by sending bad credit clients for a credit repair assessment.”

    “In the past we’ve found clients who are given that option to save themselves so much money are pretty grateful, they’re more likely to give brokers repeat business or to refer – and the advantage to using a broker becomes really evident to them,” 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.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.

    Image: suphakit73/ www.FreeDigitalPhotos.net

  • The 7 worst mistakes you can make with credit which can lead to defaults

    What are some of the big mistakes made with credit which could lead you into battling debt and having creditors sending letters of demand and listing defaults on your credit file? We look at the 7 mistakes with credit that could increase your changes of getting bad credit history.

    By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs.

    1. Leaving no room for emergencies

    Borrow within your budget. If you have a revolving line of credit or use credit cards you will need to be disciplined. Consider what you can afford and try to live frugally, rather than spending right up to your credit limit. It’s important to realise that you will pay at some point for the credit you use. If you are consistently struggling to make your repayments – then it’s time to take stock of things. Many people get into trouble with their repayments and end up with defaults on their credit file because – well – life happens and they haven’t left any room in their repayments for saving or for emergency funds. Try to separate wants from needs when you borrow.

    2. Thinking you need a large credit limit

    Ignore what the card company or bank sets for your limit – what can you comfortably afford to repay? If you intend to apply for further significant credit in the future, you will need to consider that a lower credit limit looks better to a prospective lender – so if you don’t need it – consider reducing it.

    3. Redrawing on your loan

    If you have a redraw facility on your loan – the temptation can be high to borrow against it. But you should tread carefully here. Remember you are going to be paying interest on this money – you may be better to just save it from your wages. Credit cards can also offer cash advances, but do bear in mind the interest charges on this money are exorbitant. Cash advances are a common way people can blow out their credit card debt to epic proportions leaving them no way to pay, and with defaults which destroy their ability to get new credit for 5 to 7 years.

    4. Choosing the wrong kind of credit

    Make sure your credit suits you. Make it work for you, not the other way around. What kind of payer are you? What do you need the credit for? There’s no point getting a line of credit if you are the big-spender type – you are certain to get into trouble. These types of facilities only work if you are disciplined with your spending. When you choose a credit card – consider what you need it for. If you are going to use it a lot – perhaps the rewards points could be a deciding factor. But if you are only going to use it sporadically – maybe the annual fees should be more important.

    The same goes for any big ticket item you purchase using credit – like houses and cars. What does it need to do for you? What can you actually afford? How long will you need it for? Remember a car always depreciates in value. And whilst houses can make you money in the right market, and possibly a 4 bedroom ensuite home might be a good long term investment – can you actually afford to live comfortably with this debt? If you need to go down to one income at some point – how will your repayments look then? It can cost you thousands in agent’s commission, stamp duty and legal fees to sell if you decide you have bitten off more than you can chew after you move in. Or if you default on your repayments you will probably be unable to borrow for years to come – so choose wisely.

    5. Repaying only the minimum amount

    On credit cards, you should pay off the entire credit card balance within the interest free period to avoid the high interest charges. If you don’t, you will be charged interest right back to the date you purchased each item. You not only lose the interest-free period on those past purchases, but until you pay off the balance there will be no interest free period on anything you spend in the future. This can see some people come unstuck and their credit card debts can snowball with interest until they reach the point where they are unable to pay and begin to get into arrears.

    You can find low interest credit cards, but it is still advisable to pay more than the minimum repayment amount each month. If you have debt which carries over on your card month to month you should look at a card that has a lower interest rate. There may not be as many ‘perks’, but the lower interest rate should mean the carried over debt is more manageable for you, and will prevent possible bad credit history.

    Likewise on any other type of loan that you actually want to pay off – paying the minimum amount will not get you there. You will need to pay a significant amount more to start paying into the principle – especially in the early days of the loan.

    6. Not Checking Statements

    You should check that your credit and debit card statements are correct every month – and query anything you’re not sure about. Maybe you were charged twice for an item, or charged too much. It is a good way to be alerted early to identity theft as well. You should also check your bank account statements in the same way.

    Checking your statements will also allow you to get a good handle on just where you’re spending too much and allow you to adjust your spending next month to compensate.

    7. Not Checking Your Credit Report

    Most people don’t know that every year they are able to request a copy of their credit report for free from Australia’s credit reporting agencies. This report is important, because it shows you how you will be viewed by lenders if you ever apply for a loan. You should check that all of your personal details are correct. You should check the credit enquiries are valid (id theft risk). You should also check to see whether you have any negative entries against your name. Defaults, Clear-outs, Judgments, Writs can all mean you will be refused credit if you apply.

    If you don’t believe the credit listing should be there, if you didn’t know about it or you think there might be a mistake, then the worst thing you can do is leave it there. It will mean you are locked out of mainstream credit for between 5 and 7 years – depending on the listing type. It will often mean you are told by Creditors and the agencies that the bad credit is there to stay for the term – it can’t be removed. But this may not be true.

    For professional advice on how to tackle Creditors and the credit reporting agencies about a listing which should not be there, a credit repairer will be able to determine whether your circumstances would allow for repairing the credit rating and actually negotiating the removal of the bad credit history from your credit file.

    If you want to see what is said about you on your credit file, you can contact MyCRA Credit Rating Repiars to request a free copy of your credit report. We can also help to repair bad credit history, or give you more information on your credit rating. Visit our website www.mycra.com.au or call MyCRA Credit Rating Repairs tollfree on 1300 667 218 for more details.

    Image 1: adamr/ www.FreeDigitalPhotos.net

    Image 2: David Castillo Dominici/ www.FreeDigitalPhotos.net

     

  • How Malware can infect your life and put you and your credit file at risk of fraud

    Think malware is a term used to describe clothes you go shopping in? Then you might have a big problem. Malware is what’s known as a syntactic form of identity crime – where fraudsters attempt to exploit technical vulnerabilities in order to commit fraud. Today the total malware count is just shy of 80 million. That’s scary stuff. We tell you exactly what it is, and what you can do to prevent your personal information from being exploited by fraudsters and prevent debt and bad credit history from credit fraud.

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

    Last week I received a warning from the Stay Smart Online alert service about a new spam email containing a Trojan horse virus as an attachment. This must have caught out enough people for SSO to put out a warning about it. In fact, new forms of malware catch out millions of people every day. It is reported there are 55,000 new unique malware samples per day sent out there. So how can we stay on top of it?

    Stay Smart Online defines malware, and explains how it can infect your life through your computer:

    What is ‘malware’ and how does it affect your computer

    Malware—short for ‘malicious software’—is the term often used to refer to any type of malicious code or program that is used for monitoring and collecting your personal information (spyware) or disrupting or damaging your computer (viruses and worms).

    Spyware

    The term spyware is typically used to refer to programs that collect various types of personal information or that interfere with control of your computer in other ways, such as installing additional software or redirecting web browser activity.

    Examples of spyware include:

    Keyloggers

    A keylogger is a program that logs every keystroke you make and then sends that information, including things like passwords, bank account numbers, and credit card numbers, to whomever is spying on you.

    Trojans

    A Trojan may damage your system and it may also install a ‘backdoor’ through which to send your personal information to another computer.

    Viruses and worms

    Viruses and worms typically self-replicate and can hijack your system. These types of malware can then be used to send out spam or perform other malicious activities and you may not even know it.  Both can use up essential system resources, which may lead to your computer freezing or crashing.  Viruses and worms often use shared files and email address books to spread to other computers.

    How does your computer become infected with malware

    Most spyware is installed without your knowledge. It often gets onto your computer through deception or through exploitation of browser vulnerabilities.

    •Spyware can come bundled with other software. When you download a program, the spyware can be downloaded and installed at the same time.
    •Some spyware infect a system through security holes in the Web browser or in other software. When the user navigates to a Web page controlled by the spyware author, the page contains code which attacks the browser and forces the download and installation of spyware.
    •Be wary of USB sticks from unfamiliar or untrustworthy sources, for example those given away at conferences, trade shows, or in promotional packs. These devices may contain malicious software, which could cause severe damage to your computer or compromise your personal information.
    •Some “rogue” spyware programs masquerade as security software.
    •Worms can also be used to install spyware on your computer.

    A recent article published in the Sydney Morning Herald Tech Section has some alarming concerns from some pretty hefty security people about the internet’s battle with malware. Many wonder if we could possibly be losing the fight against it – with updates unable to keep up with new developments, and anti-virus letting some slip through the cracks. If you’re game, you can read this article here: Anti-virus can’t keep up with threat onslaught.

    Concerns aside, far and away the best way we can have any hope of fighting it – is with installing updates on our computers. Here are Stay Smart Online’s best tips for preventing malware:

    How to prevent spyware from getting onto your computer

    •Install anti-spyware and anti-virus software and set it to automatically check the product website for updates. This will ensure that your computer is protected against the latest viruses and spyware.

    •Install a firewall. It will prevent unauthorised access to your computer and the installation of spyware on it. Some firewalls can also prevent information being taken from your computer and sent to someone else.

    •If you must use a USB stick from an unfamiliar source, you should always scan the USB stick for viruses or other malware before accessing any of its content. You should also disable the autorun function, which is commonly enabled on the Microsoft Windows operating system. This will lessen the risk that any malicious software that may be on the USB stick, will automatically start when you connect it to your computer.

    •Keep yourself informed about the latest security threats and solutions. You can sign up for the free Cyber Security Alert Service from this website. Alternatively, your anti-virus software vendor may have an email alert system. Look for a ‘keep informed’ tab or section on the software’s main screen.

    •Be cautious about opening emails from unknown or suspicious sources. Look at the sender of the email as well as the body and the subject of the email. Do not open email attachments or click on hyperlinks in these emails. You should install spam filters to minimise the amount of spam you receive.

    •Set your anti-virus software and anti-spyware software to automatically scan incoming email.

    •Only download files and software from reputable web sites. Read the licence agreement and terms of use before you download software and don’t download it if you don’t understand or trust the terms and conditions.

    •Be wary when exchanging files even with colleagues or friends. Scan the files before you install them or run them on your computer.

    •Never click on an ‘Agree’, ‘Ok’ or ‘No’ button to close a window on a suspicious website or pop-up. This can launch spyware onto your computer. Instead, click the red ‘X’ in the corner of the window to close the window.

    Your credit file at risk

    In SMH’s article, Charles Wale, security and risk consultant at Lee Douglas and Associates, who has consulted for over 50 ASX-listed companies says consumers need to realise their machines are targets.

    “They are after your personal information for identity theft and login details, especially for banking sites so they can remove funds in their favour,” he tells SMH.

    What can fraudsters do if they can get their hands on your personal information?

    They can steal passwords to your bank or credit accounts and they can also create a patchwork quilt of information that can allow them to eventually have enough on you to request duplicate identity documents, and apply for credit in your name.

    Running up credit all over town, perhaps buying and selling goods in your name, or in some cases mortgaging properties – the victim can have a stack of credit defaults against their name by the end of their ordeal – and sometimes no proof it wasn’t them that didn’t initiate the credit in the first place.

    Recovery can be slow, and in some cases victims have had no way to prove they weren’t responsible for the debt – with fraudsters leaving no trail and the actual identity crime happening long before the fraud took place.

    So to prevent devastating identity crime, which leaves you in debt and can leave you without any way of obtaining new credit for years to come, make it your business to educate yourself on internet and or computer risks. And think before you click….it could save your financial future.

    If you need help in recovering your good name following identity theft, you may find a professional credit repairer can give you the best chance at having the defaults removed from your credit file. Contact MyCRA Credit Rating Repairs on 1300 667 218 for more information.

    Image: Idea go/ www.FreeDigitalPhotos.net

     

  • AFP and FBI sign agreement to pool resources on identity crime

    Police from Australia and the United States have joined forces to pool their resources to fight a number of crimes which cross international borders, including identity crime and cyber-crime. We watch these changes with interest as they apply to fighting the increasing instances of identity crime which can result in victims being stung with bad credit and being banned from borrowing for 5 to 7 years when frausters use their good name to take out credit.

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

    The Australian Federal Police (AFP) and the Federal Bureau of Investigation (FBI) signed a memorandum of understanding (MoU) in Washington on Friday to share intelligence in order to fight many types of crime, including identity crime and cyber crime, ninemsn reports in its story AFP, FBI pool resources against crime.

    The MoU, called Combatting Transnational Crime, Combatting Terrorism and Developing Law Enforcement Cooperation focused on collaboration between agencies in terrorism, illicit drugs, money laundering, illegal firearms trafficking, identity crime, cyber crime and transnational economic crime.

    It also consolidated AFP and FBI cooperation in the exchange of information, resources and technical and forensic capabilities.

    The Australian Government made changes to Australia’s laws in June last year, to allow for the international collaboration of information on cybercrime. The Cybercrime Legislation Amendment Bill 2011, amended several laws in order to comply with the only international treaty on cyber-crime.

    This was done in the hope of coming up to speed with other countries in the fight to tackle an international wave of cyber-attacks.

    Cyber-crime and identity crime are a global phenomenon, and potentially this relationship between Police forces could improve the chances of tracking fraudsters, and potentially lead to more arrests.

    Currently, identity crime and cyber- identity crime is often one of those largely ‘untrackable’ crimes  – especially if it originates overseas. It can lead to the victim having any number of credit accounts taken out in their name, which can result in the victim being stuck with wrong defaults on their credit rating, or a bad credit rating they didn’t initiate, and a whole heap of trouble recovering their good name. Often Police are unable to prosecute anyone, and it is up to the identity theft victim to go about proving they didn’t initiate the bad credit.

    It will be interesting to see whether more arrests can be made or whether the sharing of information could deter cyber-criminals in the future.

    If you have been a vicitm of identity crime or cyber-crime, we would be interested to hear from you, and the process you went through. Did you let Police know of the attack?

    If you need help with a bad credit rating you didn’t inititate which would point to identity theft, whether inititated on our shores or overseas, you may be able to get assistance in recovering your good name. You may be eligible for a Victims of Commonwealth Identity Crime Certificate, and/or you may be able to get help from a professional credit repairer to help with getting those wrong defaults removed from your credit file.

    Contact our credit repair team on 1300 667 218 to get advice.

    Image: Victor Habbick/ www.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

  • They’re back…..MICROSOFT PHONE SCAM WARNING

    Fraudsters are AGAIN targeting people with home computers and calling with an offer to fix viruses supposedly on their computers. Don’t get caught out! We explain what that scam involves, and how falling for this scam can lead to loss of monies, identity theft and ultimately a bad credit score.

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

    In June last year we warned you about a ‘Microsoft phone scam’ which was rampant in Australia. Fake computer security engineers were contacting people by phone, offering to fix’problems’ they had detected on their computers.

    Callers claiming to be from ‘Windows technical support’, who knew the victim’s name and address were claiming to see problems with the victim’s computer and asking whether the victim had noticed their computer becoming slower recently.

    Then they were asking to take over the machine and fix the problems.

    A warning from the government’s Stay Smart Online alerts today reveals this scam is still continuing to swindle unsuspecting computer owners. The scammers are using legitimate remote access sotftware, such as LogMeIn, TeamView and Ammyy.

    The ACCC’S SCAMwatch website also warned consumers about the dangers of this scam back in June 2010.

    “There are many potential dangers. As well as losing money to the scammer by paying for a service that provides you no benefits, your personal and banking details are also at risk. If you give a scammer remote access to your computer, they can cause all sorts of mischief – including infecting your computer and acquiring your personal information,” the website says.

    When a fraudster is able to access our personal information they can do a host of things with it, including using it to commit identity theft. Creating fake ID, they are then able to take out credit in our name, having no care for the bad credit score they are leaving behind for the victim.

    How it occurs:

    We generally have no knowledge of the identity theft until it is too late, and we have a series of late payments against our name, which ultimately go to default stage.

    Some identity theft victims can have a string of bad credit that shouldn’t be there, but which ruins their financial future – as they show up with a bad credit score. They can’t get a loan, they can’t get a credit card, they can’t even take out a mobile phone plan or get utility account.

    If you do suspect you have been scammed, firstly you should report the potential identity theft to the Police. There is going to be no way of repairing your bad credit score without Police reports.

    Secondly, obtain a copy of your credit file, to ensure you do not already have a bad credit score resulting from identity theft. A copy of your credit file is free once every 12 months from one or more of the credit reporting agencies in Australia.

    It may also be a good idea to more regularly request a copy of your credit file. You can even alert credit reporting agencies, and your financial institution that you may be subject to identity theft, and they can ‘flag’ your accounts to alert you to any suspicious entries.

    If you do find you have a bad credit score due to identity theft, you should contact a professional credit repairer. They can help you recover your good name in the least possible time, with the most knowledge of credit reporting legislation and with the best ability to negotiate with creditors on your behalf.

    What to do to protect yourself from this phone scam

    Microsoft Australia released a statement last year, warning Australians about these fraudsters, who conduct themselves in a professional manner, and sound genuine.

    They gave this advice to Microsoft customers:

    • Be suspicious of unsolicited calls related to a security problem, even if they claim to represent a respected company.
    •Never provide personal information, such as credit card or bank details, to an unsolicited caller.
    •Do not go to a website, type anything into a computer, install software or follow any other instruction from someone who calls out of the blue.
    •Take the caller’s information down and pass it to the authorities.
    •Use up-to-date versions of Windows and application software.
    •Make sure security updates are installed regularly.
    •Use a strong password and change it regularly.
    •Make sure the firewall is turned on and that antivirus software is installed and up to date.

    Visit our website, www.mycra.com.au or call us tollfree on 1300 667 218. MyCRA Credit Repairs is a professional credit repairer that can help with repairing your credit file following identity theft, or give you more information to safeguard your good name.

     

  • Financial hardship biggest reason for complaints to Credit Ombudsman

    Financial hardship cases are reportedly the biggest single cause of complaint to The Credit Ombundsman Service. This is where a consumer claims the creditor has issued defaults for late payment of accounts without considering the consumer’s claim of financial hardship. We look at why this is occurring, and what people can do in circumstances of financial hardship to ensure they do not receive a bad credit score from creditors.

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

    The Credit Ombudsman is continuing to be flooded with complaints. COSL’s annual report for 2011 released early this month showed a 72% increase in complaints from 2010, with financial hardship cases continuing to feature as the single largest source.

    Mr Raj Venga, Credit Ombudsman, attributed the significant spike in complaints received by his office to an increase in consumer awareness, and changes to legislation requiring lenders to enter external dispute resolution processes.

    “Regrettably, 34% of all complaints we receive relate in some way to financial hardship, specifically the failure of a lender to agree to a payment variation on grounds of financial hardship. This level of financial hardship complaints is similar to previous years and we do not anticipate a reduction in the forseeable future,” Mr Venga says.

    “The underlying causes of the financial hardship complaints we see are unemployment or reduced income (30%), cost of living, including other debt (21%), followed closely by illness of the borrower or their family member (19%), business failure (14%), interest rate increases (8%), relationship breakdown (7%) and natural disasters (1%)” observed Mr Venga.

    Broker News featured more on Mr Venga’s take on financial hardship issues, in its story ‘Hardship complaints show no signs of easing’. Venga says some lenders issued defaults too quickly.

    “We achieved a satisfactory outcome for the consumer in 46% of the financial hardship cases we closed. This suggests that not all lenders are, before issuing default notices or commencing enforcement action, properly considering the possibility that the borrower may be in financial hardship and whether a change in the borrower’s payment obligations may be appropriate in the circumstances,” Venga said.

    Creditors can be eager to issue defaults, and it is essential there is a system of redress for consumers – particularly when in times of financial hardship their requests are ignored.

    A bad credit score can be debilitating for the consumer for years after the event, with defaults remaining on a person’s credit file for 5 years from the date of listing. People are generally unable to even get a mobile phone plan let alone loans or mortgages.

    Applying for financial hardship

    If a person’s circumstances change due to unemployment, illness or some other reasonable change in circumstances, they should ask their lender for a hardship variation.

    Money Help, a website run by the Victorian State Government offers some help on how to apply for hardship with creditors in the correct way.

    “If you wish to ask for hardship consideration, it is always better to put your request in writing as this means you can keep a copy of the request as a record. It is more difficult to prove the details of a request made by phone. If you entered into your loan agreement after July 1 2010, or if your debt relates to a credit card, then your credit provider must respond to you within 21 days of your application.”

    Money Help advises people to work out what they can afford to pay prior to requesting a hardship variation. They explain the benefits in applying for hardship can range from more affordable payments, to putting a stop on action towards defaulting your credit file.

    Our extra tip is for people to make it clear to the creditor what they are requesting. It would be a good idea to specifically request a ‘financial hardship’ variation to their repayments – in writing, so there is no confusion.

    What about if the creditor refuses to agree to a hardship variation?

    Creditors are legally required to consider a person’s request for variation on payment arrangements, but are not obliged to agree to any hardship variation proposal put forward. This is the grey area that finds complaints being put forward to COSL in more frequency.

    If a lender either refuses or fails to respond to are hardship request within 21 days, (or a shorter time if the situation is urgent) consumers can lodge a complaint with the credit provider’s independent dispute resolution scheme.

    What about if the creditor has already issued a default?

    If a default has been issued which consumers believe is unjust, unfair, in error or shouldn’t be there, people have the right under Australian credit reporting legislation to have the inconsistency rectified.

    The problem with seeking redress as an individual is two-fold. Firstly, without extensive knowledge of credit reporting legislation it can be difficult to enforce ruling that creditors are bound with without knowledge of what the rules are.

    Secondly, people negotiating on their own behalf can be problematic in many cases. People have often attempted to remove the default themselves, and have been told 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 for the consumer and is generally insufficient to ensure credit is obtained with some lenders.

    Alternatively, a professional credit repairer works with creditors to negotiate on the consumer’s behalf and work for the 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.

    Contact us for more information at www.mycra.com.au or tollfree on 1300 667 218 for consultation with a professional credit repairer.

  • 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

  • Valentine’s Day blues. What you need to know about your credit rating when love goes bad

    There are many people on Valentine’s Day who are falling out of love, not in love. If you are going through a divorce or separation, we provide 10 steps to financial separation and show you how to keep your clear credit file from being dumped along with the relationship.

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

    Savingsguide.com.au had a fantastic Valentine’s Day article titled Post-Relationship Credit, about what to do with your finances when you divorce or separate. It inspired us to let you know how that separation can affect your credit rating.

    If you are in the middle of a separation, it is essential to look forward into the future to ensure that it does not impact on your credit rating and lead to a bad credit score.

    Emotions are running high – and sometimes tempers as well. People often use financial ties to deliberately hurt one another.

    The most important and sensible decision the two of you can make during the separation is to cut all financial ties and as early in the separation as possible.

    Don’t hold on to joint accounts and assets ‘just in case’ you reconcile. Even the most amicable of separations can potentially turn sour down the track. The sooner you make the break, the better off your future will be – even if you do decide to get back together in the future.

    As far as creditors are concerned if the debt is in both names, then you are both responsible for it regardless of who accrued it.

    For them, there is no such thing as a broken heart, just a broke person. Your aim should be to clear that debt and repair your credit rating as soon as possible.

    10 Steps for financial separation

    If you have just left your partner or spouse, here are 10 steps to financial separation you should take as early as possible in the break-up to keep your clear credit file. If these steps can be accomplished together, you can both get on with your lives as individuals without a bad credit score:

    1. Cancel joint bank accounts. You could use the money from these accounts to go towards paying off any debts you may have together.

    2. Pay off and cancel joint credit cards. If the debt on the card/s can’t be paid off, inform the creditor that you have separated and ask them to put a stop on the account so there may be no more transactions. They could possibly make arrangements to transfer the repayments to two separate accounts.

    3. Resolve the mortgage debt. Sell the home and divide the proceedings, or sell your share of the home to your ex-spouse or vice-versa. Before this takes place, notify the bank you have separated. Make sure no further amount can be redrawn on the loan and that you receive separate statements whilst you are separated and both still own the property.

    4. Transfer names on other accounts. Phones, electricity accounts, rental properties, rates, car loans and store credit should all be transferred to one name as appropriate.

    5. Pay any unpaid accounts. No matter who has accrued these debts, the creditors will still see you as responsible. Ensure all accounts are paid on time while they are in both names.

    6. Keep a record of all undertakings. Keep good paperwork and notes related to the separation, including cancellation or changes to any accounts for future reference.

    7. Employ a good family solicitor. Legal advice is important as it relates to children, family businesses and property. Also if anything runs off course with division of debt, they can give good advice on the next course of action.

    8. Notify credit reporting agencies. Let Veda Advantage, Dun & Bradstreet, or Tasmanian Collection Agency know of your separation and any steps you have taken to separate accounts to date.

    9. Check your credit score. Request a copy of your credit report and check each entry.  A free copy of your credit file is available every 12 months from one or more of the credit reporting agencies in Australia. This is essential particularly if settlement is drawn out over a number of years.

    10. Seek help from a professional credit repairer for any defaults, writs or judgements. Once outstanding accounts accrued by your spouse are paid, there is the issue of the bad credit score which needs to be cleared so you may have the opportunity to borrow again in the future. However, dealing directly with creditors could be problematic, they will tell you that defaults are never removed but can be marked as paid. However, at the moment even ‘paid’ black marks against your name can be enough for credit refusal, particularly if you are trying to buy a new property on one income.

    A professional credit repairer can 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, advising the creditor to remove the default.

    For help with fixing credit problems following your divorce or separation, contact MyCRA Credit Repairs tollfree on 1300 667 218 or visit our main website www.mycra.com.au.

  • How can I fix my bad credit rating fast?

    “Fix my bad credit” – Sounds good  – so what’s that all about? As credit rating repair specialists, we get asked time and again to rebuild your credit history so you can get that car, that home, that credit card or basically restore your financial future. Here is a look at how we can help you rebuild your credit and rebuild your life.

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

    “Hello MyCRA Credit Repairs. I am going for a home loan, and the broker tells me when they checked my credit report, they found a default against my name. I had no idea! How can I find out what went wrong and how I fix my credit rating? Our family really has its heart set on this house and it looks like we’re going to lose it! Can you fix my credit report so I no longer have a default?”

    This is the story of many of our clients. It is not until they apply for credit that the lender obtains a copy of their credit report.  It can be devastating to find out you have a bad credit rating and even more devastating to know that your dreams of owning that home could be slipping away because of it.

    Let me tell you, it might not be all lost.

    If there are any adverse listings on your credit file which you believe are incorrect, contain errors or just should not be there – then you have the right to have those credit file errors removed.

    The problem with attempting to dispute errors on your credit file with creditors yourself is two-fold. Without knowledge of the legislation, people almost invariably get caught in legal ‘loop-holes’ which see the default, writ or Judgment left on the credit file, or at best see the listing marked as ‘paid’. Both of these results DO NOT give you that home or car loan as lenders still consider even a paid listing as bad credit history.

    Secondly, by talking to creditors themselves about credit file errors, people can accidentally ‘alert’ creditors to any mistakes they may have made in the initial method of credit reporting – allowing them to fix up their mistakes and negate the need to remove the credit file default which was placed in error.

    If you are just starting out and wondering “How can I fix my bad credit?” then the best course of action is to instill the help of a credit repairer before you do anything yourself. Ask them to check if they can rebuild your credit.

    What does a professional credit repairer do?

    A professional credit repairer will help you get a copy of your credit file and go through the bad credit history with you. They can then use their knowledge of credit reporting legislation to see where any errors in credit reporting were made, and help to enforce the legislation that creditors are bound to comply with.

    If they are successful, you not only get help with removing errors, but many times you are able to start off with a completely clean credit rating. They have the ability to completely rebuild your credit rating, allowing you to start off with a clean slate and give you the opportunity to go for any loan you choose at the best interest rates.

    Find out more by going through these 6 simple steps to credit repair:

    Or call MyCRA Credit Repairs tollfree on 1300 667 218.

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