MyCRA Specialist Credit Repair Lawyers

Tag: VedaScore

Be careful where you live because it can affect your credit score

Media Release

Be careful where you live because it can affect your credit score

15 April 2014

Australia’s new credit laws have some consumers on edge and checking their credit score to ensure they’re not blacklisted – but a consumer advocate for accurate credit reporting says beware, your credit score can be lowered by where you live as well as what you do with credit.

Graham Doessel, Non-Legal Director of MyCRA Lawyers, a firm focused on credit disputes says many things can reduce your credit score, including your address.

“Basically all the details asked for on your home loan application form can be used to calculate a credit score, including where you live,” Mr Doessel says.

The former broker says some suburbs put you in the credit danger zone.

“It’s not common knowledge, but when it comes to your address some suburbs are listed as high for commercial credit risk and if you happen to live in that suburb your score may be lower than what it would be if you lived somewhere else,” he says.

Credit reporting bureaus such as Veda Advantage and Dun and Bradstreet hold information on millions of consumers, and use this data to make predictions about credit risk. They also publish de-identified information on their collected data from time to time, such as with Dun and Bradstreet’s 2009 publication ‘Consumers still in the danger zone – A geographic look at consumer credit risk across the country’ (1)

“The Geographic Risk Indicator (GRI) assesses the likelihood of future default on a credit obligation based on demographic data. Those areas categorised as a high risk are 3.4 times more likely than average to be inhabited by individuals who have experienced previous negative credit events,” the publication states.

“It may not be fair, but the truth is, if you live in a ‘bad’ suburb your score will be reduced even if you are personally a good credit risk,” Mr Doessel says.

So what else can contribute to lowering your credit score?

Mr Doessel says how long you’ve lived at your address can also contribute to a low score.

“Lenders like to see stability, so moving just before you put in an application for finance is probably not ideal, depending on how much you’re borrowing,” he says.

Some of the many factors Veda Advantage might take in to consideration when calculating their VedaScore can include: (2)

· Types of credit provider you have made credit enquiries with (Credit providers are rated as high to low risk lenders) · Type and size of credit requested in your application

· Number of credit enquiries and shopping patterns

· Directorship and Proprietorship information

· Length of employment

· Age of credit report

· Default information including court writs and default judgments

Mr Doessel says default information can play a big part in how your score is calculated.

“Of course any adverse listings such as defaults or Court Writs and Judgements and Bankruptcies can really lower your credit score even if you live in a great suburb. We’ve helped millionaires with disputing credit listings impacting their ability to get finance,” he says.

He says repayment history is a grey area as to how it could impact your credit score. This is relevant to you if your credit provider decides to opt in to the new comprehensive credit reporting system and lists payments on your credit card or loan accounts which are more than 14 days behind.

“It’s important to pay your credit accounts on time every time as we just don’t know what impact even one late payment notation could have on your credit score,” he says.

/ENDS.

For interviews and more information please contact:

Graham Doessel – Non-Legal Director MyCRA Lawyers Ph 3124 7133

Lisa Brewster – Media Liaison MyCRA Lawyers media@mycralawyers.com.au

www.mycralawyers.com.au www.mycralawyers.com.au/blog

MyCRA Lawyers 246 Stafford Rd, STAFFORD Qld Ph 07 3124 7133

About MyCRA Lawyers: MyCRA Lawyers is an Incorporated Legal Practice focused on credit file consultancy and credit disputes. MyCRA Lawyers means business when it comes to helping those disadvantaged by credit rating mistakes.

Links:

(1) http://dnb.com.au/library/scripts/objectifyMedia.aspx?file=pdf/32/14.pdf&siteID=1&str_title=Consumers+still+in+the+danger+zone+-+GRI+Report.pdf

(2) http://www.veda.com.au/yourcreditandidentity/check/vedascore/how-my-vedascore-calculated

Image: Danilo Rizzuti/ www.FreeDigitalPhotos.net

16/04/2014
How to get a copy of your credit report in Australia
Are you in strife with credit or think you might have bad credit? Or do you just want to check what’s being said about your credit habits? With Australia’s new credit reporting regime now in place, it’s really important to regularly check your credit file to make sure it is accurate and up to date. We explain the important things you need to know about getting your credit report and the different ways you can access your credit file information in Australia.

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

You can access your credit report for free.

Most people are unaware you don’t have to pay to see what is on your credit file. Under Australia’s credit reporting laws, you can access your credit report for free from all of Australia’s credit reporting agencies annually. This allows you to keep an eye on your credit information and make sure it is accurate. You can and should make a request with each agency for your credit report – as there might be different information listed with different agencies. This copy is sent within 10 working days.

Equifax (Formerly Veda Advantage) is the primary credit reporting bureau in Australia (holding approximately 16.5 million credit files), as well as Dun & Bradstreet, Tasmanian Collection Services (if in Tasmania) and new entrant Experian.

If you need it urgently you can pay for your credit report.

Most credit reporting agencies also offer a faster service (usually within 24 hours) for a fee.

You can also check your credit ‘score.’

[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”][At the time of writing] Only one credit reporting bureau, Veda Advantage (Now Equifax) had provided their credit score to the general public. The VedaScore can be obtained for a fee, and can be handy to obtain, especially if you intend to apply for major credit such as a home loan soon. Veda explains their score:

Your VedaScore is calculated based on the information held in your credit file at a given point in time. Your VedaScore is dynamic and predicts the likelihood of an adverse event, like a default, being recorded on a credit file within the next 12 months. Your VedaScore shows where you sit in relation to other credit-active Australians in our credit-reporting database. This may be used by lenders as part of the credit assessment process; however, lenders will also use their own criteria and policies when assessing your application not only your VedaScore.

Once you have your credit report, you need to check your personal details.

If you obtain a copy of your credit report, the first thing you should do is run over your basic personal information to make sure it is correct and to make sure the information is yours. If it isn’t, you should take steps immediately to rectify this. Possible explanations for conflicting personal information could be:
- the wrong person is attached to your credit file name or
- you may be a victim of identity theft.
Contact the relevant credit reporting bureau who can help you get to the bottom of it.

You can then look at your Summary Characteristics or summary of information.

This will tell you at a glance the items of note on your credit report such as any adverse listings.

Importantly, check for cross-references.

This is another point where you may have cause to find people other than yourself attached to your credit file. This can happen if someone with a similar or the same name resides in your area or uses the same Credit Provider as you. Any issues with cross-references can be fixed through notifying the Credit Reporting Bureau.

Your credit history goes into detail about your credit habits.

Items of note which could be impact your ability to obtain credit could include adverse lisitngs such as defaults, Court Writs and Judgments, bankruptcies and debt agreements, late payments. It could also include excess credit enquiries, and excess credit accounts or amounts, just to name a few.

How your credit history can impact you.

All adverse listings could lower any credit score calculated. In this current economic climate even too many credit applications are often considered to be ‘black marks’ on the individual’s credit file in addition to defaults, clearouts, Court Writs and Judgments.

The impact of late payment notations on the credit score or on assessment of credit suitability is still unknown since the information is only newly available to lenders. Speculation has centred around just how many late payment notations will be too many to mean (a) credit is refused or (b) a higher interest rate is offered. Most times the loan options available to you are at significantly higher interest rates in order to cover the risks associated with taking on someone with bad credit.

What if my credit report is wrong?

If there’s anything on your credit report you disagree with, you can contact the credit reporting bureau to fix it. If it’s something significant like an adverse which you believe is inconsistent, unfair, or incorrect it should be disputed. Credit rating errors could be anything from the credit listing placed by the Credit Provider on the wrong credit file; to the basis of the credit listing being unfounded; to incorrect notices being provided to the individual; right through to system errors and incorrect spelling, to name a few examples.

You can attempt to fix it yourself.

This involves dealing directly with Credit Providers in your dispute. The process of dispute is not always easy, particularly if you are time poor, or do not have the necessary skills or knowledge of the relevant legislation pertaining to your case. This doesn’t mean you can’t fix your unfair credit listing without knowing it, but it makes a massive difference to the chances of removal to have this knowledge (or to employ someone who does).

Some people have in the past made a verbal dispute with their Credit Provider about their listing only to be told it can’t be removed, but can be marked as paid if it has been paid. This can deter individuals from pursuing their case of dispute. Put simply, a Credit Provider should remove a credit listing if it has been demonstrated that the listing was placed unlawfully on the credit file. It is in the demonstration that many people fall short.

If your Credit Provider refuses to remove the credit listing, then you can take your case to the relevant industry Ombudsman. This can be helpful in many cases, but in some cases it may not be in your best interests to pursue this course. It is important to note that the Ombudsman acts impartially and is not advocating for you. This means there may be areas where they can’t or won’t investigate.

You can get help to dispute your credit listing.

You can seek out external help from a third party such as a lawyer focused on credit law. A credit reporting lawyer can act in court processes; identify legal issues; provide legal advice; prepare binding agreements; conduct formal negotiations and follow through with enforcement where necessary. A credit reporting lawyer can also make formal recommendations to Credit Providers making reference to the law, and make representations on behalf of clients.

You can also seek help from a credit repair company. A word of warning though, it is important to do your homework to avoid getting ripped off. There are some ‘dodgy’ players out there who may seem cheap, but who in the end could cost you and your dispute case dearly. Consumers can consult the Credit Repair Industry Association of Australasia at www.criaa.org.au for advice on choosing a credit repairer.

Be careful about cheap and nasty credit repair. If you can’t afford to employ a demonstrated reputable and ethical advocate, consider disputing your own case instead.

Need help to check your credit report?

MyCRA Lawyers can help you check and analyse your credit rating and help assess your credit worthiness.

Get a credit file analysis.

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18/03/2014
Australians on ‘credit-collision course’ without better education.

Media Release

Australians on ‘credit-collision course’ without better education.

15 October 2013

A consumer advocate for accurate credit reporting hopes the introduction of a public scoring system from Veda Advantage will be the catalyst to boost dangerously low credit awareness and reduce the likelihood of credit disasters following the implementation of new Privacy Laws next year.

Graham Doessel, CEO of credit repair company MyCRA says the Veda credit score is calculated from interpreted data at Australia’s biggest credit reporting agency, Veda Advantage – and has up till now been used by many lenders to assess credit worthiness.

“This information is now available to consumers, and this is a positive step in terms of transparency,” Mr Doessel says.

“But what I am most hoping will happen, is that more Australians will find this new number an easy and attractive starting point to finding out more about managing their own credit-worthiness.”

He warns if we don’t facilitate credit-savviness now, possibly millions of Australians could be severely disadvantaged come March 2014 when new data sets are available on Australian credit reports.

“The need for knowledge is going to be greater next year, as more people are going to get caught out with a bad credit score, and be scratching their heads to understand why,” he warns.

Recently Veda Advantage released results of its analysis of 300,000 VedaScores with consumer research of 1,000 Australians, and found that an astounding 80% of people had never accessed their credit report.

“…despite 15% of Australians being at risk of a credit default being recorded on their credit report in the next 12 months, considerable lack of awareness exists about what a credit history is, or how a poor credit report can impact chances of getting credit from lenders,” Belinda Diprose, Veda Marketing Manager says.

Mr Doessel says it demonstrates an alarming rate of ignorance in the community.

“It’s not really the fault of consumers. In my opinion there has not nearly been enough emphasis on public credit education right across the board up until quite recently,” he says.

Mr Doessel says there are some important basics about their credit rating that Australians should know.

5 Things You Need To Know To Manage Your Credit Worthiness.

1. You don’t have to pay to see your credit file, just your credit score.

In most cases you can access your credit file for free annually from all of Australia’s credit reporting agencies, and this will remain at a standard 10-day issue from receipt of application. It is important to apply for your credit file with each credit reporting agency – as you may have defaults with only one company. They are: Veda Advantage, Dun & Bradstreet, Tasmanian Collection Services, and Experian.

2. Your credit score rates you based on other credit-active Australians.

Your credit score based on Veda data will be available to you when you pay to see your VedaScore with your credit report, via this particular credit reporting agency. Veda Advantage holds roughly 16.5 million Australian credit files – so the data should be quite predictive of your overall credit worthiness in comparison to other credit-active Australians. If you are applying for credit in the near future, this credit score could be important to know.

3. There are several factors that make up your credit-worthiness.

Items such as negative credit listings (defaults, Court Writs, Judgments and Bankruptcies); number of credit enquiries and the type and size of credit requested in your past application can all impact your credit worthiness.

But there are other pieces of information about you which also have a bearing on your credit score – including your address; your age; how long you’ve lived at your current address; any business directorship or partnership you have, and the address of the business and length of time there.

Information on the VedaScore calculation can be found on Veda’s website.(1)

4. There will be more factors affecting your credit-worthiness next year.

As of March 2014, there will be 5 new data sets available on Australian credit reports, and this data will be used in any credit score calculation.

They are: repayment history information; the date on which a credit account was opened; the date on which a credit account was closed; the type of credit account opened; and the current limit of each open credit account.

5. Late payments will impact your credit file.

You will still be defaulted if you are more than 60 days late in making repayments to any Credit Provider, but in addition if you are more than 5 days late paying a licenced Credit Provider, you will be issued a late payment notation and this will show on your credit file from March 2014.

Repayment history information applies to credit such as loans and credit cards and is being collected NOW. Too many late payments will more than likely reduce your credit score significantly.

Mr Doessel says better credit education should eventually lead to fewer inconsistencies in credit reporting.

“Credit rating errors are quite common, and the onus of ensuring the credit file is accurate rests with the consumer – so better education across the board could result in more errors being ironed out in the credit reporting systems,” he says.

/ENDS.

For interviews please contact:
Graham Doessel – CEO Ph 3124 7133

For media enquiries please contact:
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.

(1) http://www.veda.com.au/yourcreditandidentity/check/vedascore/how-my-vedascore-calculated

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15/10/2013
How will open credit scores impact Australians?

Credit reporting agency Veda Advantage has just announced it will allow consumers to receive a copy of their credit score with their credit report. We look at how that will occur, and what possible impact that will have on consumers and also brokers and whether consumers will be better able to manage their credit worthiness using this ‘score’.

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

It was announced on Monday by Banking Day that Veda has ‘lifted the veil’ on credit scores and will allow consumers to be able to apply to see their credit score. Available to consumers for the first time, the VedaScore is a number between 0 and 1,200 that summarises information on your Veda credit file at a specific point in time. The higher the ‘VedaScore’ the better an individual is considered credit worthy.

For a fee consumers will be able to access their credit score along with their credit file.

This is over and above the standard credit report, which is still free from all of Australia’s credit reporting agencies once every year and is sent after 10 working days of application.

Despite being the credit reporting agency holding the credit files of the largest number of credit active Australians, Veda has in the past remained tight lipped about default numbers and credit statistics in Australia.

But this week they have offered some insight into credit activity, whilst releasing their ‘VedaScore’ product, by offering up a ‘Veda ScoreCard’ – which reportedly combines consumer research of 1,000 Australians about their finances with analysis of 300,000 VedaScores.

One of the biggest findings was that more than 2.3 million Australians are at risk of financial strife in the next year, with 27% (628,000) at high risk of credit default from something as simple as an unpaid bill, credit card or loan.

Veda’s survey also found some interesting facts about credit active Australians. Here are three we found most troubling about the credit active Australians surveyed:

93% know they have a credit record, but don’t know you can access it

81% are not concerned about their credit history

80% have never checked their credit history

Veda says the national average credit score is 749. But whilst Veda Marketing Manager Belinda Diprose, says in a statement to the media that making the VedaScore available to consumers for the first time “makes it easier for Australians to understand and manage their credit profile” – I am unsure how this will occur – as it hasn’t been announced that there will be a breakdown of that score and how it is calculated. There may be no way for consumers to understand what they can do to prevent their credit score from being reduced.

Yesterday Business Insider Australia featured an American report on How To Improve Your Credit Score. Whilst the U.S. system has a vastly different credit reporting system – what’s interesting is, the report gives us insight into how the U.S. ‘Fico’ Score is broken down:

Chart from Business Insider Australia’s report.

A similar breakdown could be useful to consumers looking to improve their credit worthiness or prevent decision making which reduces their credit score.

How will the VedaScore impact brokers?

Today we were quoted in The Adviser in a story about the Veda Credit Score.

Graham Doessel, chief executive officer of MyCRA Credit Rating Repair, said brokers should use the score to select the appropriate loan and lender for their clients, cutting back on rejected loan applications.

“Being able to see the credit score would be invaluable to brokers,” he told The Adviser. “It will make their job much easier, because they can have an idea very quickly how the client is going to fare with particular lenders.”

Alex Shumsky from Loan Market Oakleigh also made an important point about credit scoring information in the same story:

[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”][Credit scoring] can be valuable provided the credit scoring is in line with that of the banks.

“You can submit one loan to one bank and fail on credit scoring then submit it to another bank and it gets approved, same deal, same info but they’ll score it differently,” he said.

It will still be up to brokers to match the right product to the right client – so whilst the VedaScore will be valuable in many cases, different banks will have different priorities and different scoring systems.

We also see it could bring new clients to brokers – those who have obtained their credit score but don’t know how to interpret it, or what the relevance of that score will be with each lender.

Brokers will still be quite necessary in terms of helping borrowers ‘test’ how their score rates against a range of available credit. What we don’t want to see in the future, are a great volume of borrowers ‘going it alone’ using their credit score, and then falling into the trap of worsening their credit score by generating excess credit enquiries.

So whilst revealing the score is great, we hope consumer education goes hand in hand with this product release.

For more information on your credit file, visit our main website www.mycra.com.au.

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03/10/2013