MyCRA Specialist Credit Repair Lawyers

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  • Found your special someone this Valentine’s Day? 7 tips for joining finances

    Valentine's DayHappy Valentine’s Day to all the lovers out there!  If you are one of the lucky ones that has found that right person for you, then you may be looking at joining finances – perhaps moving in together, or taking the plunge and buying a home together. Before you do, read my 10 tips to protect your credit file when you are joining finances. Unfortunately love isn’t enough to ensure our ideas about money are always going to match up. If they don’t – make sure your credit file – your good name stays intact – even if the relationship doesn’t.

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

    1. Take off the rose-coloured glasses.

    Yes, cupid may have got you good. This may be the best person you’ve ever known. But that doesn’t mean they are perfect. No, really it doesn’t! Being in love and in particular new love can be the best feeling in the world. But let’s be honest, it’s not the most practical of states to be in. Sometimes our standards go out the window and we lose ourselves in the process of adding to our ‘relationship’ and creating an ‘us’. Before you join your finances, take off the rose-coloured glasses for just a minute, and put some real thought into how you are going to make the financial relationship work. With Relationships Australia identifying conflict over money as one of the top causes of arguments and relationship breakdowns in Australia, it makes sense doesn’t it?

    2. What’s their history?

    People will do what they’ve always done. You need to know of any skeletons in their closet that may impact your relationship and your credit file. Have a frank and open discussion about the financial decisions you’ve both made in your past.

    If you are joining finances, perhaps entering a mortgage, or even just moving in together and putting the Electricity and Gas on, effectively what you are doing is joining credit history. You need to know if their credit history up till now is clear.

    It might be worth getting a copy of each other’s credit files (you can request a free copy of your credit file and a report will be mailed to you within 10 working days). If there are adverse listings, they will impact your ability to obtain credit together for between 5 and 7 years depending on the listing type. If something on either credit file is amiss or incorrect – it is probably a good time to look at disputing it. Credit listings such as defaults, Judgments, Writs or Clear-Outs can all be removed if it can be proven that the listing was placed unlawfully.

    3. What’s their money mindset?

    Knowing their credit history should give you a good indication of how your prospective partner views money. So will knowing what debts they currently have. It will give you an indication of how they feel about money, and how much debt they consider normal to handle. You can also talk about paying bills. Do they always pay them on time? If not, why not?

    Some of us are great with money and some of us aren’t. If one of each money type get together the potential for both people to be financially damaged is greatly increased. As credit rating repairers, every day we meet people who need help with fixing credit rating issues due to no fault of their own really, but they have fallen under the financial shortcomings of a partner.

    One partner can end up with a bad credit score, simply because the other person on the account has not made repayments to the account. Often people are unaware their partner is generating defaults on their credit rating until it is too late. They apply for credit in their own right and are unable to proceed due to debts and bad credit their partner has initiated. The relationship may even have ended years ago.

    4. Do your financial goals match?

    Does one of you envision you both quitting your jobs in a couple of years to go travelling while the other has been saving for their own home? Is one’s greatest goal to pay back the 3 credit cards they’ve maxed out, while the other has plans to be debt free by the age of 40? If you establish some differences in what you want out of life, talk about whether there can be a compromise. You must identify how important each goal is and decide whether you really should be entering into a financial relationship at this stage. If your differences financially are too great – perhaps you can work out a way to still be together, but keep your finances (and credit files) separate unless your goals change.

    5. Identify needs and wants.

    If you decide you want the same things out of life, it might be a good idea to agree on financial priorities, so you don’t blow out all of your good intentions buying things you don’t really need. This could reduce your fights about money and ensure you’re both really on the same page. For instance, if you decide the most important thing is to save for your own home – you can agree that the new car, the expensive dinners and the designer wardrobe are only wants and can be put off until you reach your ultimate goal.

    6. Make a joint money plan.

    It may be a good idea to make a budget plan for you both to stick to, particularly if you have made a big credit purchase like a mortgage, car or business loan. There are a number of great free websites – ASIC’s Money Smart Website is a good place to start. You can decide who is paying bills, how they are going to be paid on time, where the money is coming from, how you are going to save and what money you will have left over for luxuries. If you don’t end up being the person in charge of paying bills – that doesn’t mean you can bury your head in the sand about your finances. Check the accounts every now and then. If there are any problems or your partner has missed payments – you’ll both want to know about it before your credit file is defaulted.

    7. Leave emotion out of it.

    During your financial relationship, things can go wrong – arguments can still occur despite your best efforts to prevent them. When it comes to money, agree for your disagreements to remain business-like. That way you can always keep a dialogue about money and there are no heated emotions attached to your discussions.

    Likewise, if the relationship should turn sour you are still able to separate love and money. There may be less likelihood of post-relationship revenge purchases impacting your credit file. If you do break up and you have joint credit, notify your Creditors that you are no longer together. Make sure you both get separate statements and endeavour to separate credit files (by dissolving joint credit) as quickly as possible in order to keep control over your own credit history and keep your credit file clear.

    If you haven’t been lucky in love, and your partner has left you with a bad credit rating, MyCRA Credit Rating Repair may be able to help. Contact a Credit Repair Advisor on 1300 667 218 for more information and to determine whether you may be suitable for credit repair.

    Image: anekoho/ www.FreeDigitalPhotos.net

    Image 2: photostock/ www.FreeDigitalPhotos.net

  • Credit reform about to take effect March 1 2013

    credit reformWe look at Amendments to important legislation to take effect from 1 March, and how this will impact consumers and all involved in the credit system.

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

    The Australian Securities and Investment Commission (ASIC) has advised subscribers in a recent newsletter to be aware of new credit obligations commencing as part of amendments to NCCP.

    From March 1, the National Consumer Credit Protection Amendment (Enhancements) Act 2012 will bring reforms to a range of credit areas and ASIC will be the single regulator.

    ASIC Commissioner Peter Kell has outlined the main areas of reform, which most impacted individuals and businesses should be familiar with. Here’s the main points:

    * Changes to procedures for hardship applications under the National Credit Code.

    * Restrictions on the use of certain words, including ‘independent’ and ‘financial counsellor’.

    * Remedies for unfair or dishonest conduct by credit service providers.

    * Specific protections for reverse mortgages – such as the requirement to provide consumers with projections of the debtor’s equity in the property under a reverse mortgage and a reverse mortgage information statement.

    * Additional obligations, including new disclosure requirements, on consumer leases to provide greater regulatory consistency between leases and other functionally similar forms of credit.

    * The introduction of disclosure requirements in relation to the use of employer payment authorisations.

    * A ban on short-term credit contracts (that is not a continuing credit contract; where the credit provider is not an authorised deposit-taking institution (ADI); the credit limit of the contract is $2,000 or less; and the credit contract is for a maximum term of 15 days or less).

    * New obligations for small amount credit contracts (that is not a continuing credit contract; where the credit provider is not an ADI; the credit limit of the contract is $2,000 or less; and the credit contract is for a maximum term of 1 year) including:

    * introducing presumptions of unsuitability where a consumer is in default of an existing small amount credit contract; or in the preceding 90 days, a consumer has been a debtor under two or more other small amount credit contracts

    * disclosure requirements for licensees’ premises and websites; and * a ‘Protected Income Amount’ where the borrower is Centrelink-dependent.

    COMPLIANCE AND ENFORCEMENT APPROACH:

    Immediately following the 1 March 2013 commencement date, ASIC will adopt a balanced approach to administering the new requirements when industry makes genuine efforts to comply. ASIC will generally be tolerant of those genuinely trying to achieve compliance and will work with industry participants to address and rectify any problems.

    However, ASIC will certainly take a tougher approach where it encounters deliberate breaches, serious misconduct or significant risk of consumer detriment.

    ASIC will review its approach and compliance expectations after the first few months after which industry should have fully adapted to the new obligations.

    CONSUMERS who consider that a lender or broker has not complied with the new obligations can make a complaint to the lender or broker directly. If the problem cannot be resolved – the consumer can proceed to an external dispute resolution scheme (EDRS). Consumers can also make a complaint to ASIC to consider whether there has been a breach of the legislation.

    Further information for consumers will be available from 1 March 2013 on ASIC’s website www.moneysmart.gov.au.

    The streamlining of laws around financial hardship is a significant step in credit reform. The encouragement of an open dialogue with Creditors at times of debt stress, and the option for people to negotiate alternative arrangements with their lender other than being hit with a default on their credit file is so vitally important.

    The consequences of having a negative credit listing, whether that be a default, a Judgment, a writ or a clear-out being generally a ‘lock-down’ of mainstream credit services for the term of the listing (5-7 years).

    This means some consumers unable to secure a hardship variation, can fall into a ‘debt trap.’ Once that lower-interest option is no longer available, then alternative lenders may be sought – especially in times of emergency.

    Within this legislation, is also the cap on payday lenders which the Government hopes will stop loan sharks from exploiting vulnerable Australians:

    “The Gillard Government has moved to reduce the financial harm caused by lenders who ruthlessly impose excessive fees and charges simply because vulnerable consumers cannot obtain alternative access to credit. These reforms continue the Gillard Government’s ongoing commitment to deliver a fair go for all Australians,” Minister for Financial Services Bill Shorten said in a statement to the media last year following the bills passing.

    The Enhancements introduce a cap for small amount credit contracts where the amount borrowed is $2000 or less, and the term is 1 year or less. For these loans the maximum any lender can charge is an establishment fee of 20 per cent of the amount of credit upfront and 4 per cent for each month of the loan. This provides for maximum charges of $72 on a loan of $300 over 1 month.

    Caps on payday loans may deter loan sharks – but there is a bigger picture for those forced out to the fringe. Some people who are in situations where they can’t get mainstream credit are there because the system has failed them. Not all defaults deserve to be there, but they all have the same outcome for prospective borrowers.

    Where people are getting let down is in copping the mistake in the first place, and also in the correction of the credit reporting mistake. Whilst the powers that be say that there is a legitimate avenue for correcting credit reporting mistakes for the individual, any consumer who has had the pleasure of dealing with a big company for even small issues will attest to the difficulty in getting a straight answer, getting someone who knows what they’re talking about first time, and ultimately correcting the mistake. This is a common complaint of many of our credit repair clients. Most people are told if it’s paid up they can mark it as such but that’s about it.

    The effectiveness of consumers being able to correct credit reporting mistakes will still be a large piece of the puzzle to complete when we talk about ‘fairness’ for disadvantaged Australians in the credit system. Promised reforms to the correction of credit reporting mistakes as part of the Privacy Act 1988 amendments won’t take effect till later this year.

    Hopefully those amendments will genuinely ease the correction of credit reporting mistakes. But they must also be looked at in conjunction with the other amendments to the Privacy Act. It is not known how ‘late payment notations’ (collected now) will impact credit suitability and how unfair late payment notations will be viewed or whether they will be part of the new correction laws at all.

    So there is still going to be a time of uncertainty for many involved in credit, including for consumers. My hope is that eventually, we will see a better and fairer credit system for all – but the road to that goal could be a rocky one.

    If you are struggling with obtaining credit after being defaulted, and you believe the listing may be incorrect or unjust in any way, consider credit repair as an option to permanently remove unlawfully placed Defaults, Writs, Judgments and Clear-outs from your credit file. Call a Credit Repair Advisor today on 1300 667 218 to discuss whether you might be a suitable candidate for credit repair.

    Image: Stuart Miles/ www.FreeDigitalPhotos.net

  • Seven habits of highly frugal people

    seven habits of highly frugal peopleIn this ‘Make Credit Work For You’ post, we look at what an expert recommends as good money habits. No matter what income you are on – Finance Blogger David Ning says it is what you do with that income that sets you apart and means you have a better life. His views were featured in news.com.au this week and we look at what those seven habits are, and how you can improve your dealings with money and protect your finances and your credit file for a better life.

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

    You don’t have to be poor to be broke, and statistics prove it. In September last year the Australian Bureau of Statistics revealed that nearly 8 per cent of the nation’s richest households were living on credit.

    Of the top 20 per cent of households earning the most money, 3 per cent could not afford to pay a gas, electricity or phone bill on time during 2009-10. See more in the article ‘Aussie strugglers living beyond means.’

    Living this way is living dangerously. Often you are said to be robbing Peter to pay Paul. If something goes wrong, you can run a real risk of getting into arrears and copping a default on your credit file – or worse.

    The secret of not living paycheck-to-paycheck (or card repayment to card repayment) is by following some simple life habits.

    Frugality doesn’t mean giving up luxury and the things you love but changing your attitude towards money.

    David Ning says that the well known 7 habits of highly effective people can be adapted to become the seven habits of highly frugal people and help you live a happier and more frugal lifestyle.

    Here are those 7 habits of highly frugal people as featured in news.com.au:

    Habit one: Be proactive Mr Ning compares the habits of highly frugal people to the seven habits of highly effective people and the first step is to take responsibility.

    Quit blaming your childhood, your school, your boss or the Government and accept that you are in control of the direction of your life.

    The more you ignore the situation, the worse it will get.

    “Take a long hard look at your finances — your budget, debts, income, and expenses, and try to understand where your money is going and where you can budget better,” writes Mr Ning.

    Then you must tell people of your hope of being more financially stable which can help you focus on your goal and avoid the peer pressure that makes budgeting and frugality hard.

    Habit two: Begin with the end in mind Those who are successful in reaching their goals are those who can envisage them from the beginning.

    “If you don’t visualise what you want, then you’re at risk of other people and external circumstances influencing your life – because you’re not influencing it yourself,” he says.

    You must decide if your goal is to be debt free, build a savings account of a certain value, or live on one income in a two-income household.

    Then decide how you’re going to get there. This involves identifying obstacles standing in your way such as credit card debts. Or behavioral obstacles such as spending $10 every day on junk food.

    Habit three: put first things first Knowing why you’re doing something can help make you do it and that means knowing what is most valuable and worthy to you. It’s a lot more difficult to say “no” to something if you don’t know why you’re saying no and not focused on what’s important to you.

    It’s easy to spend more than your budgeted amount each month when you put everything before your finances such as “worrying about missing out on a dinner with friends, feel as though you have to cater a birthday party for your son and 50 of his closest friends, or don’t want to wear the same suit to a work conference two years in a row.”

    It’s important to be able to “just say no”.

    Habit four: Think win-win Don’t compare yourself to others and constantly compete with others. Instead, it’s better to have a win-win mindset which will allow you to see mutual benefits from all your dealings with people and realise that there’s enough for everyone to benefit from situations.

    Don’t think “it’s not fair” that others have a better car or a bigger house because you don’t know the whole story – and it could just be a façade for covering their huge debts.

    It’s important to focus on your own finances and know you’ll get to where you want to be some day.

    “True wealth is not measured in possessions, but in assets. When the value of your assets is greater than the amount you owe on mortgages, car loans, and credit card debts, then you have a strong net worth and are truly wealthy.”

    Habit five: Communication Listening with the intention to understand can help you reach your goal of frugality. “Don’t just wait for your turn to talk; pay attention to what people are trying to tell you,” writes Mr Ning.

    To be effective in your goal of frugality, you need to be able to listen to and understand the goals and behaviours of the other people in your life. If you’re saving but your partner is spending like crazy then your behaviours offset each other and you won’t reach your goal.

    Instead understand the needs of the people in your life and work out a way to be more frugal without them having to give up the things that are most important to them.

    Habit Six: Synergise Synergising is the habit of working as a team to get better results than if you were working on your own.

    When you have genuine interactions with people, you’re able to gain new insights and see new approaches to your problems — ones you might not have thought of before.

    Talk to people to discover new ways to do things and processes that can really help you save money. Surrounding yourself with like-minded people can help.

    “Find people who are where you want to be by joining online frugal-living forums, striking up a friendship with a fellow coupon-cutter, or starting a sewing club,” writes Mr Ning. “When you’re around people with the same goals as you, you’ll be able to share ideas and learn from each other.”

    Habit seven: Sharpen the saw In order to maintain all these habits and achieve any goal in life it’s important to look after yourself physically, emotionally, mentally and spiritually.

    This can be done frugally too by: eating better by starting a vegetable patch; exercise frugally by going for a walk or jog; interacting socially to make you feel better emotionally; exercise your mind by reading or volunteering; and spend time close to nature and expand your spiritual self through meditation, music, art, or prayer.

    Image: Feelart/ www.FreeDigitalPhotos.net

     

  • Businessman gives away $50m to Australian university students

    businessman gives away $50mFrom time to time I discuss the wider philosophies of finance with a view to helping to improve attitudes to money in Australia and with it our collective view of credit. Often I have said credit is not something that is given, it has to be earned. Well, today I came across the most amazing story of one highly successful Aussie entrepreneur who has chosen not to hand down his fortune to his kids, but to donate it. He believes in doing so he is giving a gift to not only 125 university students, but a gift to his own children. We look at this amazing story and how we might be able to apply these principles in our own lives:

    By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repair and www.fixmybadcredit.com.au https://www.facebook.com/FixMyBadCredit.com.au

    Today the headline in the Daily Telegraph’s Business News was ‘Graham Tuckwell giving away $50m in largest donation to university students.’ I was gobsmacked – and of course read on.

    Australian National University (ANU) Economics and Law Alumnus Graham Tuckwell will pour a whopping $50 million into the education of strangers in the largest donation ever made to Australian university students.

    Twenty-five undergraduates will score scholarships worth up to $100,000 at Canberra’s ANU each over the next five years – creating 125 scholarships all up over that time – from Graham Tuckwell – one of the country’s most successful financial entrepreneurs.

    The scholarships are set to run in perpetuity over the next 20 years.

    Canberra-born Graham Tuckwell studied at ANU before his global successes led him to set up ETF Securities Limited, which issues exchange traded products and has about $30 billion in assets.

    His reasons for his extremely generous donations are two-fold:

    He told News Ltd he and his wife Louise wanted to change lives and did not think it was sensible for parents to give vast amounts of money to their own children.

    “Lots of money is poisonous to have,” he said.

    The second reason – is a hope to inspire other wealthy Australians to consider philanthropy rather than just passing their fortunes down.

    “Generally speaking, if you look at the people in Australia that have got huge amounts of wealth, without naming any, they generally have not put the majority of their wealth behind strong philanthropic causes,” he said.

    “And unfortunately in some cases they pass the wealth down to later generations who have behaved badly.

    While the pair will put their four children through university and help set them up, Mr Tuckwell said he just wanted them to do what made them happy.

    “And if they create things themselves, then it’s a sense of achievement,” he said.

    “Where as if you just give them stuff, it almost destroys their desire to do things and you actually end up with kids that are a lot worse off.”

    ANU Vice-Chancellor Professor Ian Young was “in a state of shock for quite a period of time about the generosity of the donation.”

    The couple will be part of a selection panel looking for the “smartest people around” from different disciplines and will consider grades, natural ability, background and drive.

    Tuckwell Scholars will receive $20,000 a year for living costs and on-campus accommodation and will socialise together at “Scholars House”.

    It’s hoped a sense of altruism will be engendered in the Tuckwell Scholars, who will give back to society in their own ways.

    “What we’re trying to identify is regardless of where they are now, innately how good are they, what’s their real desire in life and where do they get to?” Mr Tuckwell said.

    “We would like nothing more than getting kids from different states, different cities, different country towns, different whatever.”

    The program will be evaluated after five years before the Tuckwells decide whether to continue. People can apply for scholarships at tuckwell.anu.edu.au.

    So how can most of us who don’t have a massive amount of money to give, still leave our own legacies for others?

    Well I believe the first way, is to live smaller. Leave less of a footprint. Demand less and require less to be happy. In living smaller, then we have more time. The gift of time can be given to strangers through volunteering, and we can also give it to our loved ones and to our children.

    Credit always has a place – but its place is to enhance our lives so that we can spend time with the ones we love, or to really improve our quality of life or that of someone else’s. Maybe we throw that long sought after holiday on the credit card and take the family away. Or take out repayments on an educational course that will change our working lives forever.

    Or perhaps we buy a home, after years of good saving. One that fits all the requirements of what we need, rather than what we want. A home we don’t have to work 24/7 to pay off because it is priced within our means, so its a home we can enjoy and within its walls there’s a legacy of memories for our children to cherish.

    What we shouldn’t do is spend money we don’t have, on things we don’t need, and ultimately find ourselves with what we don’t want – debt, unhappiness and a bad credit history.

    I am reminded of a line from the book Affluenza:

    “We aspire to the lifestyles of the rich and famous at the cost of family, friends and personal fulfilment. Rates of stress, depression and obesity are up as we wrestle with the emptiness and endless disappointments of the consumer life.”

    But one of the richest men in Australia thinks that those aspirations to be rich and famous aren’t so worthy.

    Tuckwell is leaving an important legacy that helping others is a great gift, to them and to ourselves. He demonstrates we should do what makes us happy, that’s what matters – and if we’re good we’ll get rewarded – but it should never be about the money.

    Image:  Kittisak/ www.FreeDigitalPhotos.net.

  • Are relaxations to guaranteed loan requirements right or wrong?

    security guarantee loanBanks have begun to relax Guaranteed loan criteria in a bid to encourage more first home buyers into the market. The relaxations from some banks will now include those outside the immediate family.  The banks seem eager to increase business in what are cautious times for home buyers. But should we all jump in? We look at what you are really risking with your asset and your credit rating by guaranteeing a loan for a family member or friend and perhaps for borrowers, when using a guarantor that is not a family member.

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

    Loan Market Melbourne broker Alexander Heifetz has recently claimed several banks have made available to borrowers ‘Family and Security Guarantee Loans.’ The recently amended policies remove certain restrictions for Guarantors, meaning a Guarantor will no longer have to be a parent, sibling or spouse of the borrower for a Security Guarantee, which was formerly known as a Family Guarantee.

    Mr Heifetz explained in a recent press release:

    “This change in policy is going to help certain first home buyers with healthy incomes but limited savings enter the property market with help from guarantees who traditionally haven’t been allowed to put their support behind a low-deposit holder’s mortgage,” Mr Heifetz says

    “Most Guarantee loans are a single loan secured by both properties: the property purchased by the first home buyer and guarantors’ property. The benefit of this option is that there is no requirement to make a Lenders Mortgage Insurance (LMI) payment and that you don’t have to demonstrate that a deposit you have was genuinely saved,” he says.

    Although these types of products are becoming increasingly popular, Mr Heifetz suggested that borrowers and guarantors considered the implications before signing a Security or Family Guarantee

    An article published last week in Australian Broker features further comment from Heifetz about the possible impact of guaranteed loans. He told Australian Broker while he appreciates that it’s a difficult time for both lenders and first home buyers, brokers need to make sure they’re helping clients view guarantee loans as a last resort – because it’s brokers in the end who are likely to be blamed when things go wrong.

     “It comes back to brokers – banks have a bunch of lawyers who will stand up for them, but brokers are the middle men and they’re the ones who will be crucified.”

    He offers solutions such as borrowers purchasing a less expensive property, or for those considering going guarantor to look at the possibility of gifting additional money or taking out a small loan as an alternative.

    Figures from Insolvency and Trustee Service Australia (ITSA) show that 441 people (non-businesses) went into bankruptcy as a result of liabilities on loan guarantees in the last financial year, and 12 entered debt agreements for the same reason, according to the ITSA’s 2011-12 Annual Report.

    If 453 people became insolvent due to liabilities on loan guarantees last year, how many more were forced to sell both homes but remained solvent? How many were forced to take over repayments on the loan for their child or family member? How many still were encumbered with a negative credit listing and refused credit for 5 years due to their family defaulting on the loan? How many didn’t know the loan was in arrears until their credit rating was impacted?

    Whilst there may be ways a borrower and guarantor can more ‘safely’ access a guaranteed loan without necessarily risking the property of the guarantor for the entire term of the loan, caution should still be exercised.

    From a credit repairer’s point of view, I would rarely recommend borrowers choose a guaranteed loan if they have other options open to them. There are just too many variables. There is no control over repayments. Now, with late payment notations on credit files, not only must repayments on the loan be made within 60 days to avoid a default listing, it must be made on time or face a late payment notation. Too many of those, and these late payment notations could impact your ability to get credit for two years.

    So as Mr Heifetz says, guaranteed loans should be viewed as a last resort – and I believe should not be heralded as a chance to boost first home buyer numbers.

    It is true house prices are still too high for many first home buyers – but banks could also relax other lending criteria such as lowering deposit requirements or allowing more gifted deposits for first home buyers – so why don’t they? And if they don’t want to bear that risk, why should we?

    Adding to the debate is Malcom Bartley, director of finance brokerage B Debt Free who has questioned why a non-family guarantor would want to make themselves so “financially vulnerable”.

    “Anything that is not direct family must be related to a business transaction. That benefit must be identified before the guarantor can be put in a position of risk. No one will take the risk just because they’re a nice guy,” he told Australian Broker on Friday.

    He warned such situations could give birth to a third-tier industry where there would be opportunities for a business to provide equity to first home buyers to obtain a government grant while they stamp the difference.

    “There’s a huge misunderstanding of the debt administration in this country – and there are groups out there that’re saying ‘if you’re in trouble come to us, we’ll buy your property and we’ll let you buy it back’” Mr Bartley says.

    He boldly said lenders need to call non-family guarantors what they really are.

    “If you’re going to call a savage canine that rips people to shreds a ‘puppy’, that’s not a lie, but it doesn’t give the true description, does it?”

    Whether or not you agree with Mr Bartley’s argument, there is no denying that any borrower who seeks help from a guarantor who is not a trusted friend or family member needs to ask two questions: what does the guarantor stand to gain from this transaction? and what could I lose?

    The risks for both guarantors and borrowers needs to be understood and weighed heavily, with the full gamut of legal advice, before any party risks their asset and their credit rating.

    Image: Ambro/ www.FreeDigitalPhotos.net.

  • Money: The Top 4 Relationship Busters

    relationship financeWhat are the ways your relationship may be at risk due to money matters? Last week we featured how your credit rating can be at risk when you enter joint debt. This week, we look at how your relationship in general can be impacted by finances. To follow we feature a great article from SavingsGuide.com.au, titled ‘Relationship Finance: The Top 4 Romance Busters’. Here it is in it’s entirety:

    Relationship Finance: The Top 4 Romance Busters.

    Money is the major reason for divorce, as well as the major source of friction in many relationships. Researchers are increasingly seeing that ‘financial cheating’- as in, lying or hiding financial issues from a partner- is as damaging as the traditional kind. Likewise, finding a financial simpatico with another person is one of the major pillars of a good relationship. So what are the top 4 relationship busters when it comes to money, and how can we avoid them in our own relationship? Inspired by an article from Investopedia.

     Weigh Me Down

    It’s unlikely, in the modern world, that two people can come together without one or both bringing with them some kind of debt. From youthful indiscretions with a credit card, student debt, a mortgage, a car loan- debt is a major factor in most of our financial arrangements. Sadly, when it’s not dealt with openly, it can also be a major sticking point i our relationships. The Fix: The only course is to be straight up. This debt is going to be a drain on your finances for a while yet, and will mean you can contribute less to the joint finances. That’s the reality of the scenario, and honesty is the only way to approach it. Your partner will deal with it, or they won’t.

    Joint Or Separate

     Relationship finance is often regarded as a tell-tale sign for the overall wellbeing of the couple. Serious judgement calls are attached to how couples deal with their finances. Either they split everything, and “they’re not committed”, or they’re completely financially entangled, and “heading for disaster”. Trying to organise your finances according to what the rest of the world says will only strain the relationship. The Fix: Your relationship is unique, as your financial organisation should be. The key is to communicate with your partner about what they feel is appropriate, and be open to change it as the relationship evolves.

     Know The Type

     When you get together, nothing is more important than whether he likes Neil Young or not. We tend to spend so much time on the inconsequential, often the really big issues get left to the side. However, you’ll be able to get a pretty good feel for how a person deals with money. Spender? Saver? Frugal to the point of no fun? These are big issues, and pretending otherwise is just putting your head in the sand. The Fix: Be open with how you see money, and where you would like your finances to be in 5 and 10 years. Talk about how their parents dealt with money, research shows it’s a big indicator.

     Little Tykes

     Every self-help book in the world has told us what issues to avoid talking about when we start a relationship. Heaven forbid you scare him off, talking of kids or money. Well, the final major relationship buster is a combination of the two- the finances of having kids. The Fix: Generally, you ascertain whether you want to have kids first, but with the costs of raising a kid now hitting the $1 million mark, you also have to discuss how to structure your finances to adapt, especially with one partner out of the workforce for a while.

    As we discover in this post, and also last week in the post ‘How to Avoid Sexually Transmitted Debt’ the most important aspect to the meeting of financial minds is to keep an open dialogue about money. Talking freely and honestly, preferably keeping the emotion out of your discussions will save your relationship. It would also help you to avoid surprise bad credit from your partner.

    If you have Sexually Transmitted Debt  – that is defaults, writs or Judgments that you didn’t initiate, and you believe are impacting your credit file unnecessarily, talk to one of our Credit Repair Advisors about where you might stand with getting your bad credit repaired. Ph 1300 667 218.

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

    Image: David Castillo Dominici/ www.FreeDigitalPhotos.net

  • How to cure Christmas credit hangover

    cure Christmas credit hangoverIn our ‘Make Credit Work For You’ post this week, we look at what you should do to recoup those financial losses over the Christmas period which are seeing you struggling with debt and that may have already impacted your credit rating this January. The below story by Karina Barrymore was featured in The Daily Telegraph and other publications this Sunday, and features comment from debt and finance experts including myself, Dun & Bradstreet CEO Gareth Jones, and Financial Counselling Australia’s Brian Harvey. I hope you find some helpful tips to assist you in getting your head above water with credit.

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

    How to cure Christmas credit hangover

    By Karina Barrymore Jan 13 The Daily Telegraph

    There are not quick fixes for a festive debt blowout.

    OK, DESPITE the good intentions, the spending urge somehow got the better of you and you’ve blown the Christmas budget. Christmas credit card bills and bank statements are about to arrive, so how do you cure a seasonal debt hangover?

    Unfortunately, there’s no gain without pain when it comes to getting back in the black. Here are the top tips from debt and finance experts for easing that pain in the purse.

    The debt collector Credit reporting agency and debt collector Dun & Bradstreet says the worst thing anyone suffering a new year debt hangover can do is ignore the problem.

    “We often see a spike in defaults in the first half of the year, which results from credit used over the Christmas period,” Dun & Bradstreet chief executive Gareth Jones says.

    “Apart from causing financial pain, this situation can also impact people’s ability to access future credit as the default stays on a credit report for up to five years.”

    His top tips are:

    Close any bank accounts or credit facilities that are not essential.

    Don’t ignore letters or phone calls about debts. If you owe money, the best thing you can do is repay it.

    Pay attention to all your bills and pay them in full and on time.

    Avoid borrowing money to get out of one debt, and don’t use one credit facility to pay off another.

    The credit file manager Credit file advocate and repair service MyCRA says at this time of year fraud and identity theft is also higher.

    “The increase in credit usage in general can also mean issues like identity theft, financial hardship and basic credit reporting mistakes can be more prevalent at this time,” MyCRA chief executive Graham Doessel says.

    “An important part of curing a post-Christmas credit hangover is to take stock of what is said about you on your credit report. There is the potential for errors to be present on your credit report. Mistakes can and do happen but the responsibility for checking your credit file rests with you.

    “Most people don’t realise how easy it is to obtain a default. If any credit account has been left unpaid for greater than 60 days, the creditor can list the overdue account as a default on your file.

    “Often we see people in the new year who have missed paying a phone bill during the Christmas rush, then gone on holiday for some time, apply for a loan in the new year and are shocked to find they have a bad credit rating.”

    Doessel says now is the time to check your credit file.

    You can receive a free copy from most credit reporting agencies within 10 days or you can pay a fee to receive it sooner.

    If you have negative listings, defaults, writs or judgments, which you believe are errors or unfair, you have the right to have these entries rectified.

    Advisers and counsellors Financial advisers and counsellors say the first and best thing to do if you are in financial strife is to seek support.

    “Act quickly and ask for help,” says Financial Counselling Australia member Brian Harvey. “Speak to a financial counsellor, family, partner, your bank.

    “If people are left with post-Christmas debt, they should contact their providers as soon as possible to let them know they are having difficulties. They can then set up an affordable repayment arrangement, which will involve them first working out what is affordable. Often people put off dealing with the debt as long as possible, during which time it often grows.”

    Hewison Wealth adviser Glenn Fairbairn says sometimes refinancing your credit card by seeking a lower-cost loan can ease the repayment burden, or allow you to get ahead because you’re paying less interest.

    “It is important to prioritise the repayment of any outstanding credit card debt, even if this means cutting back on discretionary spending. Cut up your credit card. This will ensure that you don’t do the same thing again next year.

    “And start planning for next Christmas now.”

    The legal centre “Get on the front foot and seek assistance,” Consumer Action Law Centre spokesman Daniel Simpson says.

    “If you put off getting help, you’re only going to fall further behind.”

    “The first thing you should do is pick up the phone, call the credit provider.

    “Think twice before hiring a credit repair or budgeting service to help you. These companies make it sound easy and pain-free to repay your debts but they usually charge a significant fee.”

    If you’re in credit strife

    * Don’t ignore the problem. Be proactive and ask for help.

    * Act quickly and let your creditors know you are having trouble. Ask for a new repayment plan if you need to.

    * Start to repay a little, even $10, over and above the minimum repayments.

    * Set a strict budget, including all your repayments and bills before other spending.

    * Cut up all your credit cards.

    * See a free financial counsellor, phone 1800 007 007 for an appointment.

    * Be aware that budgeting companies and credit repair agencies charge a fee.

    The message to not bury your head in the sand, and to get on top of your debts early, can’t be stressed enough to avoid getting into hot water with defaults on your credit rating.

    However, it is important to know that credit repair and budgeting services are different entitites, and do different things for you. Credit repair is generally not a budgeting service.

    What is credit repair?

    A decent credit repairer addresses credit rating inconsistencies by auditing your credit file and customer information to find areas of non-compliance by your creditor which may see your default or other negative credit listing removed from your credit file. It is useful for those people who believe their listing is unfair, contains errors or is unfounded (or those people who want to check the lawfulness of their credit listing).

    You may dispute inconsistencies on your credit file yourself, and this is free. But many people choose to use a professional credit repairer to work on their behalf because they don’t have the time, and most importantly because they find the process incredibly difficult. To ensure successful removing of a credit listing from your credit file, you must prove that your creditor did not comply with the law when placing the default or other listing on your credit file.

    So its more involved than just showing right and wrong, it has to be demonstrated according to the law. We liken it a little bit to defending yourself in Court. Sure – you may be able to defend yourself, but your case has much more chance of success if you use a legal professional.

    For help to obtain a copy of your credit report, and advice on how to tackle your credit rating defaults contact a MyCRA Credit Repair Advisor on 1300 667 218.

    Image: Grant Cochrane/ www.FreeDigitalPhotos.net

  • How to Avoid Sexually Transmitted Debt

    sexually transmitted debtBeing ‘in love’ is one of the best feelings in the world, but not one of the most practical states to be in. Sometimes personal financial values go out the window and people lose themselves in the process of adding to the ‘relationship’ and creation of ‘us’. But at some point the boring old finance stuff becomes vitally important. We look at what you need to do to prevent STD impacting your credit file.

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

    Many people run into trouble by not asking the tough financial questions about their prospective partners early in the relationship. Your financial generosity now could become the very thing that is used against you if the relationship sours. Before you enter into any financial transaction, consider carefully how secure you would be if things did take a turn for the worse.

    What’s your money personality?

    Are you a spender, a risk taker, a saver or a security seeker? There are many different types of money personalities – and you could be combination of both. If you and your partner are different money personalities, this may be the cause of arguments.

    When two different money ‘personalities’ combine, it may be all rosy to begin with, but at some point you are going to disagree about money. Fights can begin and the potential for both of you to be financially damaged is greatly increased.

    According to Relationships Australia, conflict over money is one of the top causes of arguments and relationship breakdowns in Australia.

    When there’s joint finances involved in the split, sometimes you can continue to fall under the financial shortcomings of a partner well after the relationship is over.

    When people take out any credit together, such as loans, utility accounts, homes and rental properties, they become very reliant on the partner to keep up their end of the credit repayments.

    Who is liable for debt?

    Sometimes one partner ends up with a bad credit score, simply because the other person on the account has not kept up with repayments. People can be unaware their partner (or ex-partner) is generating defaults on their credit rating until it is too late.

    The most common type of negative listing is a default, and is placed by the creditor when an account holder fails to make payments past 60 days.

    In many instances it’s not until people apply for credit in their own right that they find out they have a default against their name. The relationship may even have ended years ago and the partner is still paying for it.

    Bad credit history can last for 5-7 years, depending on the listing type.

    Many people come unstuck by not asking the tough financial questions about their prospective partners early in the relationship.

    How to Prevent Relationship Debt

    1. Consider taking a Money Personality test, such as the one at www.TheMoneyCouple.com

    2. Ask about your new partner’s financial past. People will do what they have always done. If they have financial skeletons in the closet it is possible they will continue this behaviour in the future.

    3. Ask what debts they currently have. This will give you an indication of how they feel about money, and how much debt they consider normal to handle. Does this match with yours?

    4. Talk about paying bills. Do they always pay them on time? If not, why not? This will give you a good indication of how this person regards money and credit repayments. Ring any alarm bells yet?

    5. Ask what their financial goals are for the future. Do they match yours? If your new partner wants to blow all of their money on an overseas trip, but you want to save for a home – how will this work long term?

    6. Verify their answers about existing and past debt. Ask them if you can see a copy of their credit file (and versa of course). A copy of your credit report is free every year from one or more of the credit reporting agencies in Australia. It will be sent within 10 working days. You can order your credit report here http://www.mycra.com.au/credit-file-request/.

    If you are unsure of your new partner’s financial compatibility, it could mean finances need to be fairly separate for a significant period of time.

    But the most important aspect to the meeting of financial minds is to keep an open dialogue about money. Talking freely and honestly, preferably keeping the emotion out of your discussions may help to avoid surprise bad credit from your partner.

    Image: David Castillo Dominici/ www.FreeDigitalPhotos.net

  • Have Your Say on Bill Shock

    Ever been overseas and returned home to find your mobile phone bill is as expensive as your plane ticket? You’re not alone. You may get a chance to have your say on what the telcos should do to stop bill shock and curb the excessively high data roaming charges which can see you in debt and threaten your credit rating in a new public consultation seeking to lift the telco industry.

    By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repair www.fixmybadcredit.com.au, https://www.facebook.com/FixMyBadCredit.com.au.

    The Government is welcoming public consultation on new standards to help Australians avoid bill shock while using their mobile phone overseas.

    As part of new guidelines for Telcos, set out through the new Telecommunications Consumer Protection (TCP) Code, the Australian Communications and Media Authority (ACMA) will begin consultation on developing an industry standard to help Australians best receive timely information about international roaming costs when they travel.

    Minister for Broadband, Communications, and the Digital Economy, Senator Stephen Conroy, said in a media release late last week that Australian consumers are being price gouged by telecommunications companies every time they want to make a mobile call, send a text or go online, when overseas.

    “The industry standard will be an important transparency measure. People will receive clear information about pricing, allowing them to better manage their spending and avoid bill shock.

    “We also expect that the extra scrutiny provided by the standard will encourage telecommunications companies to reduce their obscenely high prices and give consumers a better deal when they travel.”

    “I encourage everyone to have their say during this public consultation, which ends on 25 January,” Mr Conroy said.

    Here’s what the current draft standard proposes:

    A traveller receives two SMS messages when they switch on their phone when arriving overseas. The first would be sent within 10 minutes, warning the customer that extra charges will apply and allowing them to switch off international mobile roaming services.

    The second would arrive within 1 hour and must detail the cost for a standard call, an SMS, and 1Mb of data.

    The standard also requires mobile phone companies to develop cost effective monitoring tools for consumers to use when they travel overseas.

    The new standard is expected to be in operation by the middle of next year.

    In the past, we have found many times the telco customer has had difficulty disputing their phone charges before they are issued with a credit default. These credit listings can be hard to fight. Often the customer will say what they had first understood the plan to be for, or what they wanted the phone to do, was not what eventuated. This can come down to a he-said she-said situation, and the telcos – with all the power on their side can often come out on top.

    As credit repairers we see many telco customers for various reasons – in fact almost 26% of our credit repair clients have telco credit listings they need removed. Many complain of confusion over bills, date allowance and plans and also difficulties with resolving disputes – which see customers with bad credit even though they had been attempting to sort out the bill discrepancy.

    The multitude of official complaints in the area of ‘bill shock’ resulted in a major inquiry by the ACMA and the report – Reconnecting the Customer. This examined the root causes of the industry’s poor customer service and complaints-handling performance. The telco industry was asked to regulate or be regulated – and so the TCP Code was developed by the Communications Alliance (CA), and a final draft was registered in late July.

    That TCP Code came into effect on 1 September 2012. If the code proves to be effective, there will be significant positive changes for telco customers. This public consultation and is one such proposed change coming to fruition.

    So get in and have your say,

    ACMA public consultation: http://www.acma.gov.au/WEB/STANDARD/pc=PC_600133

  • How Can You Prevent a Data Breach in Your Small Business?

    If we can learn anything from recent reports of more Australian cyber-crime victims, we must learn that personal information is so important to keep safe. Not only is today’s cyber-crook or scammer after your money – they are after the money you can borrow – through obtaining credit in your name. The recent arrests of seven Romanian people in Australia’s largest credit card data theft investigation in which those criminals had access to 500,000 Australian credit cards is a chilling reminder to all Australians that we are not immune to fraud and identity theft. The fact that these criminals were able to gain this information by hacking the databases of 100 Australian small businesses prompts us to look into what Australians can do to protect their customer information within their business network and keep their customer’s personal information and credit files safe.

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

    On Thursday, the Australian Federal Police announced in a joint release to the media, that they have arrested seven people in Romania in Australia’s largest credit card data theft investigation.

    The criminal syndicate had access to 500 000 Australian credit cards and approximately 30 000 credit cards have been used for fraudulent transactions amounting to more than $30 million…

    Stolen credit card data was being used to create false credit cards, enabling thousands of counterfeit transactions to be carried out in numerous overseas locations including Europe, Hong Kong, Australia and the United States.

    After the AFP identified the cause of the data compromise, the investigation grew to involve numerous international law enforcement partners and the Australian banking and finance sector also provided strong support…

    No Australian credit card holders lost money as a result of these fraudulent transactions. Australian financial institutions reimbursed the financial losses of cardholders…

    Abacus Australian Mutuals CEO Louise Petschler said today’s developments show that cyber crime is a global enterprise.

    “It underlines how a coordinated approach by law enforcement agencies, financial institutions, merchants and consumers can help fight card fraud. We all have a role to play to ensure credit card transactions are safe and secure,” Ms Petschler said.

    “Policing is only one part of the solution to stop data compromises – credit cards should be kept in a secure place, ATMS should be checked for any unusual attachments, personal details including PIN numbers should be protected, financial statements should be checked continuously, mail boxes should be secured and if possible, ‘chip and pin’ security implemented on credit cards,” Commander McEwen said.

    The ABC ran a story the same day on this issue, ‘Australian small businesses targetted by data theft syndicate.’

    It featured IT security expert, Nigel Phair from the Centre for Internet Safety at the University of Canberra. He says it proves that many small businesses are not taking data security seriously enough.

    While he’s surprised at the scale of the operation, Nigel Phair isn’t surprised Australia was a target.

    ”We are susceptible. We are a good economy, we are ripe for the picking for these international criminals,” Nigel Phair says.

    He says the issue for small businesses, is they spend next to no money on any IT security.

    He says it is relatively simple for criminals to get hold of those credit card details if a company doesn’t have any such security.

    “It really is a matter of just hacking into the organisation, finding where their credit card details are stored and then stealing them and then transacting them yourself, you know. And then the next question coming out of that is after you do a transaction with a small to medium enterprise, there’s no reason for them to retain your data,” he says.

    “In the small to medium category I would suggest most [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”][small businesses] aren’t adhering to it [best practice when it comes to credit card data].”

    Preventing Data Breaches in Small Businesses

    Following the introduction of amendments to Australia’s Privacy Laws in the form of the Privacy Amendments (Enhancing Privacy Protection) Bill 2012, there will be more protection for individuals in regards to their personal information.

    How this will flow through to small business procedures is still to be officially outlined, as they will be exempt from some of the new laws.

    Small businesses looking to comply as much as possible with best practice guidelines for personal information security right now, should consult the Privacy Commissioner’s guidelines, found on the OAIC website.

    The Privacy Commissioner, Timothy Pilgrim says appropriate security safeguards for personal information need to be considered across a range of areas. This could include maintaining physical security, computer and network security, communications security and personnel security. To meet their information security obligations, agencies and organisations should consider the following steps:

    • Risk assessment – Identifying the security risks to personal information held by the organisation and the consequences of a breach of security.

    • Privacy impact assessments – Evaluating, in a systemic way, the degree to which proposed or existing information systems align with good privacy practice and legal obligations.

    • Policy development – Developing a policy or range of policies that implement measures, practices and procedures to reduce the identified risks to information security.

    • Staff training – Training staff and managers in security and fraud awareness, practices and procedures and codes of conduct.

    • The appointment of a responsible person or position – Creating a designated position within the agency or organisation to deal with data breaches. This position could have responsibility for establishing policy and procedures, training staff, coordinating reviews and audits and investigating and responding to breaches.

    • Technology – Implementing privacy enhancing technologies to secure personal information held by the agency or organisation, including through such measures as access control, copy protection, intrusion detection, and robust encryption.

    • Monitoring and review – Monitoring compliance with the security policy, periodic assessments of new security risks and the adequacy of existing security measures, and ensuring that effective complaint handling procedures are in place.

    • Standards – Measuring performance against relevant Australian and international standards as a guide.

    • Appropriate contract management – Conducting appropriate due diligence where services (especially data storage services) are contracted, particularly in terms of the IT security policies and practices that the service provider has in place, and then monitoring compliance with these policies through periodic audits.

    He goes on to say that in in seeking to prevent data breaches, agencies and organisations should be considering their other privacy obligations to do with data collection and retention. Some breaches or risks of harm can be avoided or minimised by not collecting particular types of personal information or only keeping it for as long as necessary.

    Consider the following:

    •What personal information is it necessary to collect? – …“Personal information that is never collected, cannot be mishandled,” he says.

    • How long does the personal information need to be kept? –…”destruction or de-identification of information that this no longer required will usually be a reasonable step to prevent the loss or misuse of that information).”

    For a full and complete picture of the OAIC Privacy Guidelines, including the relevant Privacy Principles and obligations you may be subject to, we recommend you read the above information in its full context, in this article: the Office of the Australian Information Commissioner, Data breach notification: a guide to handling personal information security breaches – April 2012.

    Image: cooldesign/ www.FreeDigitalPhotos.net[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

  • Debt stress: how to avoid it at Christmas time and dodge a bad credit rating

    What does it take to keep your head above water at Christmas time? A recent survey shows that the average Australian spends around $1,000 at Christmas, which is more than they can afford. And so they turn to credit. We look at the ramifications of letting credit pull you under at Christmas and holiday time, and look at recommendations for having a happy stress-free, debt-free Christmas and a clear credit rating in the New Year.

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

    This year more than ever, there seems to be a backlash in reliance on credit. Perhaps it’s that collectively Australians have been reducing their debt levels and trying to save money instead of spend it. So why is Christmas so different? Is it where we remove all of our previously frugal thoughts and blow the budget just to make the ones we love ‘happy?’ According to a recent news story – this seems to be the case.

    Yesterday Australian Broker featured an article ‘How to avoid a post-Christmas financial hangover’ and there were some interesting statistics about Australia’s Christmas debt numbers.

    Suncorp head of advice, Stephen Daly, told Australian Broker that over the festive season many consumers will turn to credit to fund Christmas celebrations despite saying they can’t afford the splurge:

    • 40% of 35 to 49 year olds will use credit to cover expenses they couldn’t otherwise afford, even though 60% of them feel stressed over their financial situation;

    • 25% of 50 to 64 year olds will use credit to cover expenses, even though 60% of them feel worried about their financial situation.

    But Daly says it doesn’t have to be this way. He says there are three major things consumers can do to prevent post-Christmas financial regret:

    1. Set a realistic budget within your financial means, and stick to it;

    2. Plan ahead for gift purchases – leaving gift buying to the last minute can lead to spending too much in a state of panic.

    3. Think about gift buying in the categories of what your loved ones “want”, “need” and “a little luxury” – that way you approach the task of gift-buying in a more considered way.

    “These simple tips can mean the difference between blowing out your budget in December, and paying it off over years in high interest, or removing the debt-stress.”

    Also, Daly says, it might be a good idea for Australians to re-think Christmas as a special time of year to spend quality time with loved ones, rather than being measured by the amount spent on presents.

    “It might seem like a great idea to give your loved one the iPad they’ve always wanted, but if you can’t afford it, the stress of the debt isn’t worth it. Our planners see people in January and debt can often be a cause of unnecessary stress when families over-extend themselves in December.”

    This unnecessary stress can lead to accounts in arrears, and all of a sudden the New Year can be looking pretty grim, with defaults on your credit file that could not only ruin next Christmas, but the next several.

    Defaults showing on your credit history can stop you from getting credit with most mainstream lenders, and a default will stay there for 5 years – so it’s important to avoid this at all costs.

    On November 1, we urged everyone to ‘get organised’ for Christmas  to save money and their credit rating – but life happens sometimes and you could be only now thinking about presents.

    So at this stage – it is important to stay firm if you don’t want credit to get away from you at Christmas. Here’s our Christmas budget tips:

    1. Write a budget. Only got $500 to spend this year? Then budget for that. With a little forethought you might be surprised at how well you can make your money stretch.

    2. Write a Christmas list – decide who to buy for, what to buy, where you will buy it from and how much you will spend (Christmas catalogues can be good for this).

    3. Don’t deviate from your original plan! Don’t be swayed by fancy lights and ‘bargains’ at the shopping centres – try to get in, stick to the list, and get out while you still have your sanity and your money in your wallet!

    4. Consider some handmade gifts or bulk gifts such as charity donations on your loved ones behalf as ways of keeping your budget down.

    And…..5. It’s not too late to suggest a ‘secret Santa’!

    Also, if you are having time off over the Christmas/January period, diarise to make a day to sort out your finances and include sending away for a free copy of your credit report in this list. Don’t let all of your hard savings work go down the drain because you have errors on your credit file that you don’t know about until you apply for finance. Get your credit rating repaired now while it’s not urgent and enjoy the New Year with a clear credit rating and financial freedom. For more information contact a Credit Repair Advisor on 1300 667 218 or our website www.mycra.com.au.

    Image: Stuart Miles/ www.Free.DigitalPhotos.net

  • More Australians in dispute with their Creditor over financial difficulty

    Latest statistics from the Financial Ombudsman Service (FOS) indicates a rise in credit disputes and the primary driver for the upsurge according to FOS is financial difficulty. They say more people are making complaints to the Ombudsman about credit issues, and a significant portion of those credit complaints are made from people who say they are in financial difficulty. We look at what these statistics might mean, and the best course of action to take if you are having trouble making repayments on your loan.

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

    FOS released its 2011-2012 annual review of the disputes lodged against finance professionals, including mortgage brokers and loan providers recently, and the findings were published in the Australian Broker article ‘Home loan disputes contribute to FOS complaint surge’.

    The report shows that, in total, FOS accepted 25,298 disputes, up 24% on last year’s figures. Credit issues proved to be by far the most common dispute area with exactly half of all complaints (50%) accepted by FOS concerning credit. Of these, 92% related to consumer credit, including home loans.

    FOS says it believes the primary driver of this upsurge in credit disputes is a steep rise in the number of complaints lodged by people and small businesses in financial difficulty, which accounted for 54% of all credit disputes.

    “We received 8,659 financial difficulty disputes in 2011/12, up 42% on 2010/11…The continued rise in disputes about financial difficulty suggests that a growing number of Australians are struggling financially.”

    They also say that there appears to be an increasing awareness of FOS amongst the general public, which may also help to explain the rise.

    Most of the financial difficulty disputes, according to the FOS, related to consumer credit products – particularly home loans, credit cards and personal loans.

    So what could have happened in Australia to push this increase in complaints – and are more people in financial difficulty?

    It is difficult to get any concrete proof that more Australians are on struggle-street with their home loan. There are no statistics kept on the national scale of property repossessions for any given financial year on which to compare FOS’ findings to.

    But the Reserve Bank has seen it fit to make a number of rate cuts this year, which could indicate that property repossessions had been on the increase. This was certainly the case mid-year in the State of Western Australia, where the ABC reported in July, repossessions were at an all-time high. The WA Supreme Court handled 1,500 repossession applications last financial year.

    Likewise, in May this year, it was reported in the Sydney Morning Herald ‘Forced home sales rise as slowdown bites’ that the number of repossessions lodged in Victoria’s Supreme Court rose to 1696 in the 10 months to April this year.

    “If the pace is maintained, the tally will reach about 2035 for the 2011-12 year”, the article surmises.

    Filings with the NSW Supreme Court showed repossessions had risen to 2955 cases in the nine months to March 2012.

    What we know has also changed in the Australian credit landscape, is the emphasis now put on offering help rather than penalising those in financial hardship. The Government has recently legislated for what they see as a moral and legal obligation for the lender to review a request for financial hardship before they issue a default or other proceedings.

    In August this year, The Consumer Credit Legislation Amendment (Enhancements) Bill 2012 was passed, to come into effect by 1 March 2013, which will provide a debtor with a statutory right to request a hardship variation where the debtor cannot meet their obligations under a credit contract regardless of the amount of credit that is provided under their contract.

    There will be no obligation on the Credit Provider to comply with this request, but they must have issued written notification of their refusal to comply with a hardship request prior to enforcement proceedings.

    This coming change would have meant in the 2011-12 financial year there may have been a strong push in many sectors for education around financial hardship variations, and in many cases lenders may have had an obligation to provide details of both financial hardship options, and options around dispute resolution to the appropriate Ombudsman for their case. This will certainly be the case from March next year.

    So if you are having real trouble paying your mortgage, or other significant credit, rather than wait until you are defaulted, or at worst the lender forecloses – it is important to take early action to save yourself, your home and your credit file.

    If you are sinking deeper in debt – put your hand up – you might find there is someone there to help you out of it.

    6 Tips for Applying for financial hardship

    1.  If you have a change in your circumstances – like unemployment, illness, injury or other reasonable issue you should ask for a financial hardship variation. This should be requested as soon as possible to avoid going into ‘default’ with your repayments.

    2.  Put your request in writing and keep a copy as a record.

    3. You may need to use the actual words “financial hardship variation” for your lender to officially recognise the request, and to avoid confusion as to what you’re asking for.

    4. Check your loan agreement as to the terms you entered into around financial hardship. Those agreements post-1 July 2010 have a clause which requires the lender to respond to you within 21 days.

    5. Do your homework first. Money Help, a website run by the Victorian State Government offers more help on how to apply for hardship with creditors in the correct way.

    They advise 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 (as well as preventing you from losing your home).

    6. 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.

    If a lender either refuses your hardship request or fails to respond, you can lodge a complaint with their independent dispute resolution scheme, such as the Ombudsman they are a member of.

    For more advice on debt management, visit ASIC’s Money Smart website www.moneysmart.gov.au.

    NB: This content is for general information only and should not constitute legal advice, nor replace seeking help from a professional financial advisor.

    Image 1: koratmember/ www.FreeDigitalPhotos.net.

    Image 2: graur razvan ionut/ www.FreeDigitalPhotos.net

  • Beware identity theft with latest bank ‘refund’ phone scam

    Identity Theft Warning: Banking phone scammers currently on the prowl in Australia are attempting to not only pilfer easy profits from unsuspecting victims via wire transfer, but it looks like they’re also after crucial identity information which could lead to identity fraud. We look at this scam, and what you should do if you think you’re a victim.

    By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs and www.fixmybadcredit.com.au Visit our Facebook page https://www.facebook.com/#!/FixMyBadCredit.com.au

    Last week Australian Broker online reported on this alarming banking scam ‘Banker phone scam bamboozles customers’ which involves the Australian Bankers Association (ABA). The report says twenty five people had contacted the ABA in the three days prior to report a telephone scam – and at least two had fallen victim to the scam which involved fraudsters calling customers supposedly on behalf of the organisation offering instructions on how to obtain a ‘refund’ for overcharged fees.

    “They then ask the customer to go to a post office to receive a so-called ‘refund’ – ranging from $5 000 – $7 000. Instructions are given to call the criminals on arrival at a post office, where they try to talk the customer into sending money, via the post or Western Union, claiming it’s a fee for the so-called ‘refund service’.”

    And alarmingly:

    “In several cases, customers have been asked to reveal additional information, including whom they bank with, how long they have been a customer of said bank, what their credit card number is and what their driver’s licence number is,” The Australian Broker report says.

    Steven Münchenberg, ABA chief executive, said in a release to the media, that most customers contacting ABA after receiving the phone calls have been suspicious and have not provided any money or information to the con artists.

    “However, members of my staff did speak to two customers who had sent [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”][money] to the criminals – around $300 via Western Union. Unfortunately, there is no hope of retrieving that money and it is lost to fraud,” he says.

    “These criminals are preying on people and we are urging anyone who receives a call with a promise of easy money to hang up.”

    What could fraudsters do with the additional information they are asking for?

    What fraudsters are doing, is attempting to gather extra information from their victim over and above what they might already have in front of them.

    If they have a person’s full name plus who they bank with, and what their driver’s licence number is they have the basic building blocks for an identity theft attempt. They can call the bank and have some kind of identity information on which to proceed with accessing bank accounts AND accessing further credit in the victim’s name.

    What should you do if you suspect too late you’ve fallen for a scam?

    If you have just found out you are a victim, we recommend you contact the Police – as well as your bank – especially if you have given over personal information to fraudsters. Don’t be embarrassed – it is only through identity theft being reported that data gets collected and appropriate preventative measures eventually get put in place.

    Telling your bank also means they can flag your accounts and upgrade security on your account/s.

    You should also contact the credit reporting agencies that hold your credit file and inform them that you may be at risk of identity theft.

    At this time, you should also order a copy of your credit report. If there are any inconsistencies on your credit report – change of address, strange credit enquiries and instances of credit you don’t believe you’ve accessed yourself, then you may already be a victim – and should do all that’s possible to follow up on each account so as not to accrue defaults on your credit file that should not be there.

    Credit file defaults are difficult for the individual to remove and generally people are told by creditors they remain on our file for 5 years, regardless of how they got there. Any negative listing will prevent you from obtaining credit, so it is vitally important that your credit file is clear.

    Although it seemed so easy for the fraudster to use your good name in the first place, you are now faced with proving the case of identity theft with copious amounts of documentary evidence.

    If you have neither the time nor the knowledge of our credit reporting system that you may need to fight your case yourself, you can seek the help of a credit repairer. A credit repairer can help you to clear your credit file and restore the financial freedom you rightly deserve.

    The reason a credit repairer is usually so successful in removing your credit file defaults, is their relationships with creditors, and their knowledge of current legislation.

    Visit www.mycra.com.au for more information on identity theft or how to repair bad credit.

    Image: imagerymajestic/ www.FreeDigitalPhotos.net

    Image 2: nuttakit/ www.FreeDigitalPhotos.net

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  • Beware Christmas ‘spamvertising’ could threaten your credit file

    Fraudsters are out in full force this festive season and are planting cyber-bombs for you to unknowingly let off in your computer. We look at some of the things to watch out for, and what falling for a scam or downloading a virus could do to your credit file.

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

    According to an article ‘Cybercriminals start spamvertising Xmas themed scams and malware campaigns’ in online tech magazine ZD Net, security researchers from Symantec are warning about a recently intercepted flood of Xmas themed malicious and fraudulent campaigns.

    “Over the past year, we’ve seen numerous attempts to entice users into clicking on these links, by impersonating a legitimate message or notification from a respected, trusted and well known brands. These are prone to intensify over the next two months,” ZD Net’s Dancho Danchev writes.

    In an example of spamvertising, recently cybercriminals spamvertised millions of emails impersonating the popular e-card service 123greetings.com in an attempt to trick end and corporate users into clicking on client-side exploits and malware serving links, courtesy of the Black Hole web malware exploitation kit.

    According to Security experts Sophos, Black Hole malware is marketed and sold to cybercriminals in a typical professional crimeware kit that provides web administration capabilities. But it offers sophisticated techniques to generate malicious code. And it’s very aggressive in its use of server-side polymorphism and heavily obfuscated scripts to evade antivirus detection. The end result is that Blackhole is particularly insidious.

    Users are advised to avoid clicking on links found in such messages, and to report them as spam immediately.

    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). Some programs (spyware) collect various types of personal information or interfere with control of your computer in other ways, such as installing additional software or redirecting web browser activity.

    The purpose of malware can be to obtain personal information for identity theft and login details – especially for banking sites.

    If fraudsters 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 theft happening long before the fraud took place.

    So to prevent devastating identity theft, which leaves you in debt and can leave your credit file tarnished and 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 this Christmas….it could save your financial future.

    If you need help to recover your credit file after identity theft – you may be suitable for credit repair. Contact a Credit Repair Advisor at MyCRA Credit Rating Repairs for help 1300 667 218 or visit the main website for more information www.mycra.com.au.

    Image: digitalart/ www.FreeDigitalPhotos.net

  • More positivity for housing: ABS Housing Finance figures continue to climb for September

    Good news again for the property market, with data from the Australian Bureau of Statistics recording another increase in Housing Finance figures. Some economists say Australians are starting to make the most of interest rate cuts. We look at the ABS Statistics, and look at the importance of credit file education to a possible new buyer’s market.

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

    Figures released today by the Australian Bureau of Statistics on September 2012 Housing Finance figures show owner occupied housing commitments rose 0.9% from August to 46,395, up from an upwardly revised 45,983 in August.

    An increase of 1.0% was predicted by economists.

    CommSec chief economist Craig James (featured in The Australian today) says the ABS data suggests home loan value could be on the rise.

    “The data shows that loan value is rising at a faster rate than the actual number of loans,” he said.

    “That suggests that there’s increased confidence by borrowers, or that home prices are edging a little higher.”

    Here is an excerpt from the ABS release:

    SEPTEMBER KEY POINTS

    VALUE OF DWELLING COMMITMENTS

    September 2012 compared with August 2012:

     The trend estimate for the total value of dwelling finance commitments excluding alterations and additions rose 0.7%. Investment housing commitments rose 1.1% and owner occupied housing commitments rose 0.5%.
     In seasonally adjusted terms, the total value of dwelling finance commitments excluding alterations and additions rose 3.8%, with investment housing commitments rising 8.6%.

    NUMBER OF DWELLING COMMITMENTS

    September 2012 compared with August 2012:

     In trend terms, the number of commitments for owner occupied housing finance rose 0.5%.
     In trend terms, the number of commitments for the purchase of new dwellings rose 3.0%, the number of commitments for the purchase of established dwellings rose 0.5%, while the number of commitments for the construction of dwellings fell 0.3%.
     In original terms, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments rose to 19.3% in September 2012 from 18.6% in August 2012.

    Over the past six months, the Reserve Bank of Australia has shaved a full percentage point from the key interest rate. As a result, standard variable mortgage rates have on average come down by 55 basis points to 6.85 per cent.

    This seems to finally be making an impact on Housing Finance, with both August and September data showing a recorded increase in commitment numbers.

    The ABS reports that in original terms, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments rose to 19.3% in September 2012 from 18.6% in August 2012. Between September 2012 and August 2012, the average loan size for first home buyers rose $400 to $289,300.

    As more buyers enter the market, we feel it is worthwhile to ramp up our education efforts around credit history. Many people do not know what a credit file is – many more don’t know the process for being listed with bad credit, and more again assume that if there was something amiss with their credit file, that they would somehow be informed. They don’t realise that the onus is on them to check their credit history on a regular basis (at least once per year) just to make sure that errors have not been made on the credit file. Errors can happen to anyone – from all walks of life.

    People may believe their credit history is clean, but creditors can and do make mistakes with credit reports, and often it is not until people apply for finance that they have any idea they have bad credit. At this time the process of investigation and complaint can be stressful and can sometimes mean the prospective borrower misses out on the home loan while the discrepancy is addressed.

    The process of clearing an unfair credit listing can sometimes be very time consuming – especially if the creditor has not cooperated with requests to supply documentation in a timely fashion, or the matter has to be referred to a third party for investigation.

    So the message is, if people are thinking about buying a home in the near future – they should grab a copy of their credit file, and make sure it has the “all clear” before they apply for finance, and before they get their hearts set on any particular home. This is free for all credit active Australians once every year and we encourage any home buyer to request a copy of their credit report. It takes 10 working days or for a fee to the credit reporting agency, it can be sent urgently. But what it does is give peace of mind – not only to the Purchaser, but to the Broker or Bank Manager, and in some cases a clear credit file can help get the deal over the line with the Agent and Seller.

    If there are any inconsistencies or out and out errors on the credit file, the advantage to getting those removed is generally thousands and thousands of dollars in interest saved. A clear credit file allows purchasers to capitalise on those interest rate cuts with the mainstream lender of their choice rather than being forced into the non-conforming sector at much higher interest rates.

    To find out more about the benefits of using a credit rating repairer to dispute credit listings, see our recent post How Do I Fix My Bad Credit? Or contact a Credit Repair Advisor at MyCRA Credit Rating Repairs on 1300 667 218 or visit the main site for more information www.mycra.com.au.

    Image: Idea go/ www.FreeDigitalPhotos.net