When brokers meet clients many times they find that all the finances stack up well for approval, until a credit check is performed and it reveals some defaults that will not get the deal over the line. GRAHAM DOESSEL was a broker with his own company ‘MORTGAGE NOW’ before founding his credit rating repair company MY CRA.
He nominates bad credit ratings as being the number one frustration for many brokers. “Often times the clients don’t even know they have a bad credit rating. It’s only once the credit check is done that these problems arise – and sometimes unpaid bills for as little as $200 can kill the deal”.
“A loan with a non-conforming lender is not always viable. Also sometimes the clients aren’t willing to pay the higher interest rates for this type of loan” he says. Sometimes a non-conforming lender is not the only option to take to rescue a bad deal.
A credit rating repairer works by negotiating on behalf of the client to remove defaults from their credit file; thus clearing the file for any future borrowing. Here’s how a credit rating repairer can benefit these clients and your brokerage.
- Saves time Turnaround can be slowed down because the credit file is not perfectly clear. Or if a client really needs to repair their credit rating to get approval, they have two options. They can have the default removed by a credit repairer, or they can take out a series of smaller loans and repay those in order to improve their rating. The latter can take months or years to improve someone’s rating, yet employing the services of a reputable credit repairer may only take a few days – depending on the nature of the default. “In some cases, brokers have recommended My CRA and we have cleared the credit file all within the finance clause of the house contract” Mr DOESSEL says. The credit repairer negotiates on behalf of the client to have the default/s removed from their file. This is due to professional knowledge of creditors, processes and current legislation.
- Saves clients It could be possible to rescue those hundreds of clients per year who would not qualify for any loan due to crippling defaults. Although not every client is eligible for credit repair due to the nature of their default –for those who are eligible the success rate is high. The first step is to refer that client to a credit repairer who will assess their situation. “We have a 97.1% success rate in removal for every case we take on” he says.
- Saves money Credit rating repair allows brokers to get a better deal for their client. Instead of referring people to a non-conforming lender at a high interest rate (of which they will switch in time and possibly pay exit fees to do so) the client can save thousands by having their credit file cleared. This would allow them to go with a lender at a lower interest rate. The fee they pay the credit repairer is miniscule compared with the thousands they will save on interest and exit fees.
- Creates trust In business if someone is willing to really help clients with the best thing for them, they will reap the long term rewards. Sometimes the best thing for people is to start fresh with a clean slate. If brokers are able to offer people the best long term deal for them, then they may have that client for the long term and will be seen as their trusted advisor for life.
- Creates referrals Clients will tell others how well they were looked after by not only the credit rating repair company but the broker who referred them in the first place. All business is sent back to the referring broker once the credit file is cleared.
- Creates financial freedom A clear record can allow clients to take out not only first mortgages, but can be the catalyst that sets them on the road to borrowing for investment properties; business ventures etc – all using their familiar and trusted mortgage broker.
- Educates and empowers If brokers were to recommend a credit check at their first meeting – it could save lots of heartache for the client and time for the broker. “More needs to be done to educate people on their credit rating, how easy it is to get a default slapped on their file and the ramifications of this before they are sitting opposite a broker applying for a home loan” “I tell people they should check their credit file every 12 months, much like they do with their super or bank statements to make sure everything is in order. This will pick up any errors straight away” Mr DOESSEL says.
For more information on credit repair and testimonials from brokers, please visit http://www.mycra.com.au/