MyCRA Specialist Credit Repair Lawyers

Tag: surprise bad credit

How your credit rating can be damaged when you move.

Did you know, that every time you move house, you run the risk of damaging your credit rating? It happens if loose ends are not tied up on your credit accounts before you leave your old address. We look at some ways you can make sure you don’t risk your good credit rating, and ability to get a loan in the future when moving house.

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

Moving is a time of stress and chaos. All of your important stuff is boxed up and in transit. You’re flat out cleaning the old place on time, let alone tending to those financial loose ends. But to maintain the integrity of your credit rating, it is really important that you have a plan for making a clean break at each residence.

Time and again we have the situation where clients apply for a home loan and are refused because they have ‘surprise bad credit’, which when we track it back for them is due to the fallout of accounts sent to their previous address. This may not always be your fault.

We have had plenty of clients who’ve needed help disputing their credit listing, because their Energy Provider could not work out that cancellation of their old account and installation at the new address meant that they had actually moved. Their final account was sent to their old address because they had not specifically provided a forwarding address.

Not notifying your Credit Provider of your new address when you move can lead to a Serious Credit Infringement or ‘clear-out’ listing being placed on your credit file. This listing is, as the name suggests, much more serious than a default.

What is a Serious Credit Infringement (SCI)?

A serious credit infringement is an overdue debt in which the Credit Provider has been unable to contact the individual for 6 months following the overdue debt, despite reasonable attempts by the Credit Provider to do so. A SCI is listed on your credit file for 7 years. If contact is made within that time, and the overdue debt is paid, the listing is then downgraded to a default, which carries only a 5 year term.

To avoid this, here are 5 tips for keeping your credit rating in check when moving house:

1. Let all your Credit Providers know you will be moving and give them a forwarding address.

You are obliged to update your Credit Providers with your forwarding address when you move. When you make that call to your Credit Provider, be sure to make a note of the day, time and person you spoke to about the request.

Often we have people say they have told their telco or their energy company they are moving, and provided a forwarding address, but mail has still gone amiss and the client has ended up paying for it. If you have specific details of your call – the Creditor may be able to bring up the recording and verify your request.

2. If ending an account with a Provider, request a final account.

If you need to cancel your account, such as an Energy or home phone account when you move, make sure you request a final account for services. There may be incidental charges, or pay out fees as well as days accrued in the new bill period. Pay that notice as soon as possible.

3. Don’t assume your account is finalised until you get it in writing.

Once you have paid your final account, request a statement be sent in writing verifying the account is at an end. If you don’t receive that notice, chase it up.

4. Cancel any direct debits.

Places such as gyms and childcare centres operate payments via a separate direct debit company. If you have any direct debits set up, you should notify the company of the cancellation and of your forwarding address.

Don’t assume correspondence with your gym is enough to cancel that account. You will have signed a separate contract with the direct debit company, and you are just as obligated to them if you have missed payments, for whatever reason.

5. Redirect mail.

Despite providing a forwarding address, and despite your attempts to finalise your accounts, there can be instances where a Credit Provider continues to send mail to your old address.

Creditors can and do make mistakes, and one common mistake is simple computer or human error with billing systems. To prevent their oversight from costing you your good name through bad credit, consider redirecting mail through Australia Post to your new address.

If you have just found out you have bad credit, there are many circumstances where you may be able to successfully dispute the credit listing. For help to dispute your default or Clear-Out listing, contact MyCRA Lawyers on 1300 667 218.

Image: Ambro/www.FreeDigitalPhotos.net

27/03/2014
The bad credit nightmare affecting Australian home buyers.

Media Release

The bad credit nightmare affecting Australian home buyers.

25 July 2013

Consumers all over Australia every day are faced with surprise bad credit when they apply for a home loan, and according to an advocate for credit reporting accuracy, many consumers get railroaded into living with debilitating defaults on their credit file that simply should not be there.

CEO of MyCRA Credit Rating Repair, Graham Doessel says many home buyers end up angry and disappointed when their finance is declined due to bad credit, particularly when they believe their credit file shouldn’t have any black marks.

“While paying your bills on time is the best way to ensure you have a clear credit file, it does not guarantee your credit report will be clear. The nature of credit reporting is that there is much opportunity for human error and these errors are usually not uncovered until people go about checking their credit file. At the time of finance application, it is too late,” says Mr Doessel.

He says often consumers who query a credit listing with their Credit Provider are told that credit listings cannot be removed, but can be marked as paid if they have been paid. But he says the ramifications of bad credit are so huge, consumers should not be burdened by them if there are inconsistencies.

“A default – even a paid default – will impact your ability to obtain credit generally for the entire time it is listed on your credit file – which is 5 years.”

“If you are convinced a credit listing shouldn’t be there, or is inaccurate in some way, then you should dispute it,” Mr Doessel says.
5 Steps to Fixing Your Bad Credit History
1. Determine what account the default is for. If you don’t have a copy of your credit report, you will need to order one. If you haven’t ordered a copy in the last 12 months, it will be provided at no cost from the credit reporting agencies in Australia. They are Veda Advantage, Dun & Bradstreet, Experian, and TASCOL (if in Tasmania). You may have listings with one or all of these credit reporting agencies. They will take 10 working days to send you a copy of your report. For a fee you can have one sent to you urgently. On your credit file, will be the company the default is with, and an account number. This should correspond with an account you have with them. If it doesn’t, or if you don’t have any accounts with the company in question, there is a good chance there may be a mistake on your credit file.

2. Gather all your information first, and try and determine how the default made its way to your credit file. Before you call the company in question, sort out what you know about the situation. Have they made a mistake? How have they made it?

3. Write to the Creditor to ask for information on the account. You may need to find out more about how the default got there. Every company keeps a file on its customers and you can write to them and request your account information to date.

4. It is going to be hard going. Most people find it really hard to correct their credit listing themselves -especially if it’s complicated. For one, the Credit Provider has to comply with a whole heap of legislation that crosses different codes, and if you don’t know legally where they may have made errors – it’s pretty hard to persuade them they have done the wrong thing. Secondly, negotiating anything on your own behalf can be tricky – the old foot in the mouth routine can get you into trouble and see you stuck with the listing for the whole term. If you are able to show cause as to why the listing was put on your credit file unlawfully, there is a chance it will actually be removed.

5. You may need an advocate. If you find out you have bad credit, and you have neither the time, skill, nor the patience to investigate and dispute your credit listing, you can consult a credit repairer. They will conduct an audit-like investigation of your case and the circumstances surrounding the credit listing, based on the relevant legislation applicable to your case. And most importantly, they will probably think of things you had never thought of to strengthen your case for the default removal.

Mr Doessel says credit repair is not suitable for everyone, and sometimes if people have ‘done the crime’, they may need to do the time. He says if you are a serial offender for late payments, or if you are currently struggling to keep your head above water, then new credit- especially major credit – is NOT going to make it all better.

“But if you have been unfairly treated, or there has been a mistake on your credit file, then you have a right to insist on that inconsistent listing to be removed or corrected,” he says.

He says avoiding bad credit requires a combination of good repayment habits, good communication with Credit Providers, and regular reviews.

“Every consumer should order a copy of their credit report regularly – at least once a year – to ensure everything reads accurately. It is also important to check your credit report before applying for any major credit – so if there are any inconsistencies they can be addressed prior to the finance application,” he says.

/ENDS

Please contact:

Graham Doessel – Founder and CEO MyCRA Ph 3124 7133

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

Ph 07 3124 7133 www.mycra.com.au www.mycra.com.au/blog 246 Stafford Rd, STAFFORD Qld

MyCRA Credit Rating Repair is Australia’s number one in credit rating repairs. We permanently remove defaults from credit files.

Credit Rating Errors In Australia: Background information

To date, there are no official statistics provided to the Australian public on the number of defaults or other credit listings on Australian credit files.

Likewise, there are currently no statistics on the numbers of disputed credit listings, or on listings which have been removed or altered on Australian credit files.

This arguably makes it difficult to obtain any scope on the prevalence of bad credit and on the prevalence of credit reporting inconsistencies. We argue lack of information on the number of disputes makes it difficult for consumers to have any scope for the likelihood they may succumb to credit reporting errors, and may make them less likely to routinely check their credit file for inconsistencies.

In 2012 a Veda Advantage spokesperson commented on the possible number of errors on credit reports within Veda. 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,” Head of External Relations, Chris Gration told Today Tonight. (i)

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). (ii)

It revealed 34% of the credit files surveyed contained 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. (iii)

Transferring those figures from the Choice study to the number of credit files in Australia today, could balloon the figures to almost 5 million errors, inconsistencies or flaws. But unfortunately these figures are only estimates – due to the lack of real statistics.

(i) http://au.news.yahoo.com/today-tonight/latest/article/-/10670080/credit-ratings-check/

(ii) http://www.smh.com.au/articles/2004/02/09/1076175103983.html

(iii) http://www.caslon.com.au/reportingprofile3.htm

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25/07/2013
Credit rating self-checks essential for prospective home buyers

Media Release

Credit rating self-checks essential for prospective home buyers.

19 February 2013

A credit rating self-check should be top priority for prospective home buyers before finance application to ensure ‘surprise’ bad credit doesn’t mean they lose their dream home, according to a consumer advocate for accurate credit reporting.

CEO of MyCRA Credit Rating Repair, Graham Doessel, says a credit file check will reveal any adverse listings which will lead to credit refusal.

“Home buyers should ignore their credit file when applying for finance at their own peril. In many instances it can be more important to have a clear credit rating than a huge deposit,” Mr Doessel says.

He says many people assume if they pay their bills on time they should have a clear credit history, but surprise bad credit and credit reporting errors can and do occur.

“So many of my clients are unaware they have defaults until they apply for major credit such as a home loan, and are flatly refused because of defaults. The clients can lose the house and have their dreams shattered, all because of a credit file which contains defaults that may not even be lawful,” he says.

A credit file exists for anyone who has ever been ‘credit active’ and is used by lenders to assess the risk and borrowing capacity of potential borrowers.

Defaults are put there by creditors when accounts have remained unpaid for more than 60 days.

Defaults remain on a person’s credit file for 5 years from the date of listing, and have the potential to severely impact a person’s ability to obtain credit.

“Currently, any default can be enough for an automatic decline with most of the major banks. Many lenders are even rejecting loans for excess enquiries such as two in thirty days or six within the year.”

“It also affects the type of loan people may be eligible for, the interest rate they are offered and price of establishing the loan. The lending options become more expensive and limited,” Mr Doessel says.

He says many clients had what they thought were impeccable repayment histories, but found out the hard way that they were the victim of credit reporting errors.

“At this time in Australia, creditors basically have the go ahead to list defaults and other negative listings on consumer credit files with very little by way of checking in terms of accuracy of that listing,” Mr Doessel says.

The onus is on the consumer to ensure their credit file reads accurately.

“That’s why it’s so important for everyone to know what is said about them on their credit file, and to know how to dispute any errors that come up,” he says.

House hunters can request a copy of their credit report from one of the major credit reporting agencies such as Veda Advantage, Dun and Bradstreet or TASCOL (if in Tasmania). These agencies will provide people with a free copy of their report within 10 working days from receipt of the request.

“If you request this report well before you are ready to buy a house, you can potentially save yourself the embarrassment and heartache of being knocked back for finance due to credit file defaults, and that’s also one less lender-generated credit enquiry on your credit file,” he says.

Demand for ‘credit rating repairers’ has grown due to what Mr Doessel says is a credit system fraught with difficulties.

He says many of his clients have attempted to dispute an unfair listing themselves and have come up against problems.

“Most times the Creditor says defaults are never removed, but can be marked as paid if the account has been settled. Effectively they are bullied into paying the overdue account and are still copping the default on their credit file.”

But Mr Doessel says if a listing contains errors or inconsistencies, it should be removed.

“It takes someone who is aware of how to work within the legislation, demonstrate effectively where the Creditor has made errors and show cause as to why a listing is unlawful and should be removed. Unfortunately this is something many consumers have neither the time and or skills to do effectively,” he says.

/ENDS.

Please contact:

Graham Doessel – CEO MyCRA Ph: 07 3124 7133

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

246 Stafford Road, STAFFORD QLD. http://www.mycra.com.au

MyCRA Credit Repair is Australia’s number one in credit rating repair. We permanently remove defaults from credit files.

Image: graur codrin/ www.FreeDigitalPhotos.net

19/02/2013
Are you getting bad credit for Christmas?

Media Release

Are you getting bad credit for Christmas?

An advocate for accurate credit reporting warns every credit-active Australian should make sure they’re not getting bad credit for Christmas, as surprise bad credit can happen to anyone, even those who pay all their bills on time.

CEO of MyCRA Credit Rating Repair, Graham Doessel says it is important for Australians to understand how easy it is to wind up with a bad credit rating and not know it.

“There are no class lines, whether rich or poor if you have taken out credit then you could be at risk. I would like to say it is always cut and dried – don’t pay, get bad credit but in reality it’s not that simple. The only way to be sure is to check your credit file regularly,” he says.

A default listing can be placed on a consumer credit file if a bill payment is late more than 60 days.

But Mr Doessel says there are many reasons why a consumer can be defaulted other than simply choosing not to make bill payments on time.

“Creditors don’t always comply with the law, and sometimes they make mistakes – wrong names, wrong addresses, as well as human and computer errors,” he says.

He also says certain circumstances can leave consumers more vulnerable.

“Identity theft, separation from your spouse, bill disputes, overseas trips and even moving house would definitely be situations where afterwards I would be checking my credit file to make sure it was clear,” he says.

Mr Doessel says unfair credit listings should be disputed, as negative listings such as defaults will mean credit refusal or higher interest rates for the term of the listing.

He says listings are not removed by creditors unless the credit file holder or a third party acting on their behalf can provide adequate reason and lots of evidence as to why the listing shouldn’t be there.

“It’s not easy to dispute a credit listing – but it is a point worth fighting for,” he says.

Consumers are entitled to obtain a free copy of their credit report from Australia’s credit reporting agencies once per year. This is sent within 10 working days of the request.

“If you have some time off soon, this might be a great time to do your credit file check. If there is something amiss on your credit report, you can dispute it with your Creditor yourself or you can contact a professional credit repairer to do it for you,” Mr Doessel says.

People can visit http://www.mycra.com.au/credit-file-request/ for help to get their free credit report.

/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 246 Stafford Rd, STAFFORD Qld

MyCRA Credit Repair is Australia’s number one in credit rating repairs. We permanently remove defaults from credit files.

Image: posterize/ www.FreeDigitalPhotos.net

21/12/2012
Aussies “On the Move” need clear strategy to tie up financial loose ends.

Media Release

Aussies “On the Move” need clear strategy to tie up financial loose ends.

Australian residents are as mobile as ever, according to a recent Australian Bureau of Statistics report, but an advocate for accurate credit reporting warns every time Australians move, they run the risk of damaging their credit rating by not tying up loose ends on their accounts.

CEO of MyCRA Credit Rating Repair, Graham Doessel says it is vitally important that consumers have a strategy for making a clean break at each residence to maintain the integrity of their credit rating.

“Time and again we have the situation where clients apply for a home loan and are refused because they have ‘surprise bad credit’, which when we track it back for them is due to the fallout of accounts sent to their previous address,” Mr Doessel explains.

The recent ABS report ‘Still on the Move’ examines internal migration across Australia between 2006 and 2011 censuses. The report revealed that 41.7% of Australian residents had moved in the five years prior to the August 9 2011 Census night.[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 the rate of Aussies on the move is reflected in the volume of moving-related credit issues, and these are not always the fault of the consumer.

“For example, we had a client who needed their credit rating repaired because their Energy Provider could not work out that cancellation of their old account and installation at the new address meant that they had actually moved. Their final account was sent to their old address because they had not specifically provided a forwarding address,” he says.

Mr Doessel provides 5 tips for keeping your credit rating in check when moving house:

1. Let all your Creditors know you will be moving and give them a forwarding address.

You are obliged to update your Creditors with your forwarding address when you move. When you make that call to your Credit Provider, be sure to make a note of the day, time and person you spoke to about the request.

“Often we have people say they have told their telco or their energy company they are moving, and provided a forwarding address, but mail has still gone amiss and the client has ended up paying for it. If you have specific details of your call – the Creditor may be able to bring up the recording and verify your request,” Mr Doessel says.

2. If ending an account with a Provider, request a final account.

If you need to cancel your account, such as an Energy or home phone account when you move, make sure you request a final account for services. There may be incidental charges, or pay out fees as well as days accrued in the new bill period. Pay that notice as soon as possible.

3. Don’t assume your account is finalised until you get it in writing.

Once you have paid your final account, request a statement be sent in writing verifying the account is at an end. If you don’t receive that notice, chase it up.

4. Cancel any direct debits.

Places such as gyms and childcare centres operate payments via a separate direct debit company. If you have any direct debits set up, you should notify the company of the cancellation and of your forwarding address.

Mr Doessel explains, “Don’t assume correspondence with your gym is enough to cancel that account. You will have signed a separate contract with the direct debit company, and you are just as obligated to them if you have missed payments, for whatever reason.”

5. Redirect mail.

Despite providing a forwarding address, and despite your attempts to finalise your accounts, there can be instances where a Credit Provider continues to send mail to your old address.

“Creditors can and do make mistakes, and one common mistake is simple computer or human error with billing systems. To prevent their oversight from costing you your good name through bad credit, consider redirecting mail through Australia Post to your new address,” he says.

Mr Doessel says Australians who have moved and have now been lumbered with surprise bad credit need not put up with it for 5 or even 7 years.

“If your Creditor has an incorrect address for you and they have placed a default or Clear-out on your credit file then you should dispute your credit listing and insist your credit file reads accurately,” he says.

/ENDS.

Please contact:

Graham Doessel – Ph 3124 7133

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

Ph 07 3124 7133 www.mycra.com.au www.mycra.com.au/blog 246 Stafford Rd, STAFFORD Qld

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

——————————————————————————–

[i] http://www.abs.gov.au/websitedbs/censushome.nsf/home/CO-68[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

18/12/2012
Award winning broker turned advocate for credit reporting accuracy reveals the surprise bad credit stopping Aussies refinance.

Media Release

Award winning broker turned advocate for credit reporting accuracy reveals the surprise bad credit stopping Aussies refinance.

Australians are looking to refinance at a rate of knots, but a consumer advocate says some home owners are discovering they have bad credit history when they attempt to refinance, despite believing their repayment record has been impeccable.

Frugality sparked by the GFC and improved banking competition have pushed the number of refinanced properties to a 20-year high.

Consumers have been urged to move their mortgage away from the ‘big four’ banks as a response to the raising of home loan rates, but a consumer advocate warns that many home owners may discover they have bad credit history, even if they think their repayment history has been impeccable.

Former broker turned consumer advocate for credit reporting accuracy, Graham Doessel CEO of MyCRA Credit Rating Repairs, says it is essential that all existing home owners check their credit file is accurate before making an application for finance.

“For many home owners it may have been years since they applied for major credit so it is important to know if their good name is compromised in any way before they make an application,” Mr Doessel explains.

He says regardless of whether people have been diligent payers, creditors can and do make mistakes with credit reporting.

“People can have many errors thrust upon them unknowingly – bill mix-ups, computer errors and human error can all contribute to these surprise black marks. Unfortunately any black mark on your credit rating will be an automatic decline with most lenders,” he warns.

“Creditors don’t always comply with the law, and sometimes they make mistakes.”

Approximately 63% of the clients who request credit rating repair through MyCRA Credit Rating Repairs have defaults, writs or Judgments which are listed in error on their credit file.

“We have clients who are facing identity theft; some are caught in issues over separation from their spouse; some have been disputing the bill which went to default stage and many people are just victims of the fallout from inadequate billing procedures – wrong names, wrong addresses, human and computer errors,” Mr Doessel says.

Under current credit reporting legislation, consumers are entitled to obtain a copy of their credit report from the credit reporting agencies once a year.

People need to contact all the credit reporting agencies to request their report – as creditors have access to 3 agencies within mainland Australia and 4 in Tasmania. The report must be provided to them in writing within 10 days of the request.

He says listings are not removed by creditors unless the file holder can provide adequate reason and lots of evidence as to why the listing should not be there.

“Credit repair requires knowledge of the legislation, lots of evidence and perseverance. But for those people whose financial freedom is hindered because their credit file contains errors, it is a point worth fighting for,” he says.

Despite credit file errors – there may be other reasons refinancing is not an option. Currently many home owners are facing falling property prices. Negative equity can halt any refinancing plans.

Mr Doessel says home owners also need to also calculate the in and out fees that may be present on any new loan to ensure the switch is really saving them money.

People who want more information on credit repair, or who wish to obtain a free copy of their credit file can contact MyCRA Credit Rating Repairs on 1300 667 218 or visit their website – www.mycra.com.au.

/ENDS

Please contact:

Graham Doessel – CEO Ph 3124 7133

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

www.mycra.com.au www.mycra.com.au/blog 246 Stafford Rd, STAFFORD Qld

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

http://www.news.com.au/money/property/property-price-falls-lock-homeowners-into-loans/story-e6frfmd0-1226305228916#ixzz1qHuXqibk
http://www.mycra.com.au/media/television.php
http://www.smh.com.au/articles/2004/02/09/1076175103983.html

Image: Stuart Miles/ www.FreeDigitalPhotos.net

08/11/2012
Help I have applied for my first home, but I have been declined! How do I fix bad credit?

[fusion_builder_container hundred_percent=”no” equal_height_columns=”no” menu_anchor=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=”” background_color=”” background_image=”” background_position=”center center” background_repeat=”no-repeat” fade=”no” background_parallax=”none” parallax_speed=”0.3″ video_mp4=”” video_webm=”” video_ogv=”” video_url=”” video_aspect_ratio=”16:9″ video_loop=”yes” video_mute=”yes” overlay_color=”” video_preview_image=”” border_size=”” border_color=”” border_style=”solid” padding_top=”” padding_bottom=”” padding_left=”” padding_right=””][fusion_builder_row][fusion_builder_column type=”1_6″ layout=”1_6″ spacing=”” center_content=”no” hover_type=”none” link=”” min_height=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=”” background_color=”” background_image=”” background_position=”left top” background_repeat=”no-repeat” border_size=”0″ border_color=”” border_style=”solid” border_position=”all” padding=”” dimension_margin=”” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=”” last=”no” element_content=””][/fusion_builder_column][fusion_builder_column type=”5_6″ layout=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” border_position=”all” 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=”small-visibility,medium-visibility,large-visibility” center_content=”no” last=”no” min_height=”” hover_type=”none” link=””][fusion_text]

Bad credit is common, affecting millions of Australians and sometimes it goes undetected until your loan is DECLINED.

This ‘surprise bad credit’ can see you declined on a home loan application. We show how it may have happened, and give you 7 steps to fix a bad credit report.

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

Applying for finance for a home can be nerve-wracking. There’s the deposit – have I saved enough? There’s your income – do I earn enough? There’s the home – have I paid the right price?

When all of these factors combine to give you, on the face of it, a good chance of approval for finance then there’s the issue of choosing the right home loan, at the right rate, with the right factors for your future. So you go through all of these sometimes stressful aspects of property buying, and you make the official application for finance with your chosen lender. It all looks good…

Until you are slapped in the face with an APPLICATION DECLINED. You should qualify for a home loan, but you don’t because your credit report shows up with a default.

You have no idea what the default is for…you always pay your bills on time…but that little default from what looks like a utility company, is messing with your future and caused the decline.

How can they refuse me a home loan based on this, you ask? They can, and they do. You see, a default is an account in arrears greater than 60 days.

If you have a default on your credit file, it tells the lender that you don’t pay your bills on time. They have a responsibility to ensure you can manage the debt you will accrue. This is evidence that you can’t manage your debts, you look like a risk to them, so they refuse you the loan, despite all the other factors being in your favour.

What Do I Do Now?

Now you know you have bad credit, you have two options. You can wait for 5 years. A default remains on your credit file for 5 years from the time it was listed, and after this time it ‘drops off’ your credit report. It will impact your ability to obtain credit generally for the entire time it is listed on your credit file. So – for 5 years you will have a hard time getting anything other than a credit decline anywhere, from mortgages to car loans to credit cards and even mobile phone plans.

If you don’t want to wait, you can investigate whether it should be there at all.

Mistakes can and do happen. Mistakes in credit reporting are most times only picked up by the credit file holder, so if you think there is something amiss with your credit file it is up to you to put it right.

Here are the steps you need to take to correct errors on your credit file:

7 Steps to Fixing Credit Reports

1. Determine what account the default is for.

If you don’t have a copy of your credit report, you will need to order one. If you haven’t ordered a copy of your credit file in the last 12 months, it will be free from the credit reporting agencies in Australia. They are Equifax (Formerly Veda Advantage), Dun & Bradstreet, and Tasmanian Collection Service (if in Tasmania). You may have listings with one or all of these credit reporting agencies. They will take 10 working days to send you a copy of your report. For a small fee, you can have one sent to you urgently.

On your credit file, will be the company the default is with, and an account number. This should correspond with an account you have with them. If it doesn’t, or if you don’t have any accounts with the company in question, there is a good chance there may be a mistake on your credit file.

2. Gather all your information first, and try and determine how the default got on your credit file.

Before you call the company in question, sort out what you know about the situation. Have they made a mistake? How have they made it?

4. Write to the Creditor to ask for information on the account.

You may need to find out more about how the default got there. Every company keeps a record of its customers and you can write to them and request your account records to date.

5. Decide on how you’re going to tackle them.

Now you want to try and negotiate for the Creditor to remove your default. Don’t go in guns blazing – bear in mind, there is nothing to say they have to remove the default. Want you want to do is encourage them to do the right thing by you.

6. It is going to be hard going.

Most people find it really hard to correct their credit listing themselves –especially if it’s complicated. For one, the Creditor has to comply with a whole heap of legislation that crosses different codes, and if you don’t know legally where they may have made errors – it’s pretty hard to persuade them they have done the wrong thing. And who’s got time to learn all of that?

Secondly, negotiating anything on your own behalf can be tricky – the old foot in the mouth routine can get you into trouble and see you stuck with the listing for the whole term. In reality, many people trying to fix their own credit rating get told they can have the listing marked as paid, but it is never removed. This is not enough to guarantee you the home loan. If you were able to show cause as to why the listing was put on your credit file unlawfully, there is a chance it will actually be removed.

7. Consider getting a professional on board.

For a pain-free approach – at any time, you can hire the services of a credit repair professional law firm. Most of them will look after getting a free copy of your credit file for you, order your documents from the Creditor as well as directly negotiate with them to remove your bad credit, based on the relevant legislation applicable to your case. And most importantly, they will probably think of things you had never thought of to strengthen your case for the default removal. This is your best chance at getting the listing removed completely from your credit file, which will allow you to apply for finance with a mainstream lender again… Without the DECLINE!

If you’ve done the crime, you may need to do the time

If you’re a serial offender for late payments, if you are currently struggling to keep your head above water, then new credit- especially major credit such as a mortgage- is NOT going to make it all better. We don’t advocate wiping the slate clean because of a technicality, and contributing to your fall from grace once again when you default on your home loan. The credit reporting system was designed for you, to stop you from getting in way over your head and maybe 5 years without credit is a good time to learn some financial strategies for the future. This is where a decline can actually be helpful.

But, if you firmly believe you are capable of making repayments on this home, if you know that the listing was put there unfairly, or perhaps even if the listing was accrued because you had a period of financial stress you have now recovered from and you weren’t helped in the appropriate ways at the time, then you may have a case for removing the default. If you are unsure, you can always talk to MyCRA Lawyers on 1300 667 218, who can make an assessment for you on your suitability for credit repair.

Image: stockimages/ www.FreeDigitalPhotos.net

Image: David Castillo/ www.FreeDigitalPhotos.net

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05/07/2012