27 March 2014
A massive overhaul of Australian credit reporting law now means big brother is watching you like never before, and a consumer advocate for accurate credit reporting says there are some actions you should take now to minimise your risk of being locked out of a home loan.
On March 12, Australia moved to ‘comprehensive credit reporting’ when amendments to the Privacy Act had final implementation.
Mr Doessel, Non-Legal Director of MyCRA Lawyers, a firm focused on credit disputes, says new information about your credit habits is now open to prospective lenders who check your credit score.
“More credit information unfortunately means there’s more reason for lenders to say no to your home loan application or to increase the interest rate offered,” Mr Doessel says.
Recent statistics from credit reporting bureau Veda Advantage reveal 80% of Australians have never checked their credit history and 53 per cent were not aware that they could ask for a copy of their credit file.
Mr Doessel says “with over 16.5 million consumer credit files held by Veda Advantage alone, we’re talking millions of Australians who may be at a disadvantage under the new laws through simple lack of education.”
To help promote understanding of our new laws Mr Doessel identifies seven key points which you should be aware of, especially if you intend to buy a home over the next few years.
7 credit score health tips
1. Repay all accounts by the due date -especially your credit card and loan accounts. Any time you are more than 5 days late paying your credit card and loan accounts, a notation can be made in your ‘repayment history’ and remains there for two years. If payment on any credit account over $150 (including telco and energy bills) is more than 60 days overdue, you can have a default applied against your name which has a five year ‘shelf-life’.
2. Repay more than the minimum amount on credit cards. You don’t want to unknowingly end up in arrears and with a late payment notation against your name because you didn’t pay enough.
3. Be careful with the amount and type of credit you apply for and use. Too many credit accounts and cards could reduce your score, even if you’re not using them. Also restrict the type of credit you apply for. Too many ‘alternative’ or high interest accounts could see you with a lower score. Reducing your number of credit enquiries is also a good idea.
4. Ask for help if you need it. If you have circumstances which mean you temporarily can’t make repayments on time, contact your Credit Provider as soon as possible – preferably before your accounts are overdue. You can ask for a financial hardship variation to help ease the burden while you get back on your feet.
5. If you disagree with an account or bill – act quickly. The earlier you can get to the bottom of an unfair bill the less likely it could impact your credit file. If the Credit Provider ends up listing the account on your credit file as either a late payment or a default, you can ask the credit reporting bureaus to list the bill as disputed on your credit file while you sort it out.
6. Check your credit score. This is available once a year at no charge from Australia’s credit reporting bureaus – Veda Advantage, Dun & Bradstreet and TASCOL (if in Tasmania). You can also pay to have them sent the same day. Try sites like www.freecreditrating.com.au. You’ll see whether you’ve got any black marks and also whether you’ve been the victim of fraud or identity theft. Veda Advantage also allows you for a fee to see your Vedascore.
7. Dispute errors as soon as possible. Creditors can and do make mistakes. If you find something on your credit file you don’t agree with – get it sorted out. You can ask the credit reporting bureau which holds the listing to identify it as disputed, and then go about fixing the problem.
There are avenues you can source to dispute your own listing. You can also seek out external help from a third party such as a lawyer focused on credit law, or a credit ‘repairer’.
Mr Doessel recommends those who use a credit repairer to do their homework to avoid getting ripped off.
For interviews and more information please contact:
Graham Doessel – Non-Legal Director MyCRA Lawyers Ph 3124 7133
Lisa Brewster – Media Liaison MyCRA Lawyers firstname.lastname@example.org Ph 3124 7133
MyCRA Lawyers 246 Stafford Rd, STAFFORD Qld Ph 07 3124 7133
About MyCRA Lawyers: MyCRA Lawyers is an Incorporated Legal Practice focused on credit file consultancy and credit disputes. MyCRA Lawyers means business when it comes to helping those disadvantaged by credit rating mistakes.
Image: Stuart Miles/ www.FreeDigitalPhotos.net
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