More buyers apply for home loans, but dreams could be shattered by credit rating blunders.
A consumer advocate for accuracy in credit reporting says the finance sector should focus on educating prospective home buyers about their credit file in the wake of signs more Australians are capitalising on interest rate cuts and applying for home loans.
CEO of MyCRA Credit Rating Repairs, Graham Doessel, says many buyers will be caught out with a bad credit rating at the time of finance application, because they simply don’t know the importance of checking their credit file for inconsistencies beforehand.
“We find 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,” Mr Doessel says.
The warning comes as new housing figures from the Australian Bureau of Statistics released on Monday point to a continued rise in the number of home loans.
September’s key figures reveal owner occupied housing commitments rose 0.9% to 46,395, up from an upwardly revised 45,983 in August.[i]
With a possible new influx of buyers to the finance market, Mr Doessel says it is vital that people know about credit reporting and how it can impact their ability to get a home loan.
He says many 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 and are refused, that they find out they have bad credit.
“This surprise bad credit is happening to many people, from all walks of life – businessmen, families – we have even had a millionaire require our services to remove an error on his credit file so he could purchase a home for his wife,” he says.
Bad credit is shown on the credit file for between 5 and 7 years, and most often impacts the credit file holder’s ability to get mainstream credit.
“Most are forced into three scenarios – 1) ride out the 5 or so years until the listing falls off their credit rating; 2) get a home loan at a much higher interest rate with a non-conforming lender; or 3) dispute the credit listing which they believe shouldn’t be there,” Mr Doessel says.
But he says at the time of finance application the process of investigation and complaint can be stressful and can sometimes mean the prospective borrower misses out on the home loan while the credit rating discrepancy is addressed.
“Disputing and removing an unfair credit listing can be a difficult and time consuming process, made more stressful if the credit file holder has pressures from finance deadlines,” he says.
People can check their credit file has the “all clear” before they apply for finance, by contacting Australia’s credit reporting agencies Veda Advantage, Dun and Bradstreet and TASCOL (if in Tasmania) and requesting a copy of their credit report – which is free once a year. This report is mailed within 10 working days, or for a fee to the credit reporting agency, it can be sent urgently.
“If there are any inconsistencies or out and out errors on the credit file, generally thousands and thousands of dollars in interest is saved by having them removed, as the credit file holder can then take advantage of those interest rate cuts by applying for a home loan with a mainstream lender at competitive rates,” Mr Doessel says.
For more information on removing or disputing credit rating errors, contact MyCRA Credit Rating Repairs on 1300 667 218.
Graham Doessel – Founder and CEO Ph 3124 7133
Lisa Brewster – Media Relations MyCRA firstname.lastname@example.org
246 Stafford Rd, STAFFORD Qld
MyCRA Credit Rating Repairs is Australia’s front-runner in credit rating repairs. We permanently remove defaults from credit files.
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