A mistake on your credit report can be remedied. If your credit file has incorrect information, or the default listing is wrong, we look at what you can do to fix your bad credit in Australia.

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

Bad credit is not pretty. Many times people don’t find out about a default on their credit file until they are sitting in front of the lender – mortified, frustrated and heartbroken at the loss of a mortgage, business loan or car loan. This ‘bad credit’ listing will remain on your credit file for the next five years, and for the next five years you will be restricted on your access to credit and forced out of the mainstream market. Heck, even a mobile phone plan is looking unlikely. All because a credit provider decided you had been late paying an account.

But what if the creditor has gotten it wrong? What if the wrong information is on your credit file or a mistake has been made on your credit file?

Firstly, you are not alone. Thousands, maybe millions of Australians are facing this issue of credit rating errors right now. Some of those people have tried to dispute an unfair credit listing, and many of those people have been unsuccessful. They have been told that credit listings are never removed, that they will remain on your credit file until the ‘drop off’ date. If they have been paid, they can be marked as such, but there will still be some notation on your credit file.

Don’t buy into it!

If a credit listing has been placed unlawfully on your credit file, if there are mistakes to any aspect of the credit listing, or the listing just should not be there, then you do have the right to have those inconsistencies removed.

Some basic things to look for with default listing rules:

1. More than 60 days must have elapsed since the account was officially in arrears.

2. You must have received written notification of the default before it was listed.

If either of these has not occurred, then you should contact the creditor in writing to request the default’s removal – as the creditor has not followed basic rules whilst listing the default on your credit file and it has been ‘unlawfully’ placed on your credit file.

3. Has the default been listed for more than five years?

The listing should have ‘dropped off’ your credit file, and you should request the creditor remove the default from your credit file.

When it’s a little more complicated, or you want to ensure you have the best chance of the incorrect listing being completely removed from your credit file, often it is best to seek professional help.

Dangers In Disputing Your Credit Listings Yourself…

Often you only get one shot in disputing a credit listing. If you alert creditors in the wrong way that you have issues with a credit listing, there is a danger they may make changes to records, or delete certain records from their files in order to solidify evidence that the listing was applied correctly. Listings are not removed by creditors unless the credit file holder can provide adequate reason and lots of evidence as to why the listing should not be there, and this lack of evidence can also let people down in their case for removing an incorrect listing.

Professional Credit Repair

A credit repairer specialises in disputing defaults and other credit listings which should not be there. They will investigate the disputed credit listing, request further information as required and draft a considered complaint to your creditor. They are well versed in the 2,000 pages of legislation which relates to credit reporting, and they can cross-reference this legislation as it applies to your particular case.

You may have a listing removed due to the creditor not complying with some of the more well-known credit reporting legislation, or a credit repairer could find more specific evidence which can aid the case for removal of the credit listing which you may never have found yourself. It is in the investigation and presentation of the case for removal and finally in the negotiation with the creditor that people can see the true value of credit repair.

Credit repairers also know what avenue to take if the creditor refuses to remove the listing, and will if necessary escalate your complaint to a higher authority.

Who Chooses Credit Repair?

People choose to use a credit repairer when they don’t have the time, patience, negotiating ability, temper, or knowledge of legislation to dispute their credit listing with the creditor themselves. People who want the best chance of getting a default removed will use a professional, as most people would use a lawyer if they were defending themselves in court. It’s a bit like David and Goliath in many cases – so credit repairers provide the benefit of their experience to tackle the big guys on your behalf.

Volume of Credit Rating Errors

A Veda Advantage spokesperson, was recently interviewed by Channel 7 Australia’s Today Tonight, about the possible number of errors which are contained on Australian credit reports.

“We give out about 250,000 credit reports to consumers every year. But only in 1 per cent of cases is there a material error on the file, so a default or an enquiry that’s incorrect,” Mr Gration told Today Tonight.

But an Australian Consumer Association (now Choice) survey from 2004 revealed that 34% of the credit files surveyed in their small scale study contained errors or inconsistencies.

We think the current real figure is probably somewhere in between that. But in any case, there’s far too many people with inconsistent credit reports, and far too many people left in the dark about how to correctly dispute them.

So it’s important to raise awareness, and show people how to give themselves the best chance at clearing bad credit.

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