Nhu had a payment default to a due to a misunderstanding with a vehicle payment.  He thought this had been resolved however much to his disappointment he found that a default has been listed.

This was a real problem for Mr Nhu as his had lowered his credit score to 375 and this was making things impossible for him to secure credit for his new business.

In just three weeks Clean Credit was able to have this default removed from Mr Nhu’s credit file and restore his credit rating to 703 which meant he was able to secure the credit he needed.

Nhu’s case study by admin

Clean Credit was recently featured on channel 7’s Today Tonight; the topic was some of the proposed changes to credit reporting laws.

Since this story went to air we have received many calls from people that are very concerned about how these changes will affect them.  Many feel some of these changes are very unfair, I tend to agree.  Firstly let me explain what is causing all the concern.

At the moment a negative credit listing such as a payment default can only be recorded after an account is sixty days or more in arrears.  This means that anything less than this cannot be recorded and although an account may be behind it will not affect a person’s credit file until after the sixty day period.  It’s important to note that given credit providers follow all the necessary steps such as issuing demand letters etc they may list a default after 60 days.  There are laws that prevent a credit provider listing a default too long after the event however we will leave this topic for another time.

One of the proposed changes to the credit reporting laws is to allow the recording of late payments on a credit file in as little as one week.  It is important to keep in mind that the recording of a late payment is not the same as a default and the credit reporting agencies are quick to point out this difference however the real question is how will credit providers react to these listings?  After all the credit markets are tough at the moment and credit providers are being very careful about whom they provide credit to.

Another point of concern is Dun & Bradstreet has recently reported that business’ take on average 54 days to pay their bills.  This being the case one can see the potential for many late payment listings recorded on credit files.

I wonder how a credit provider will react when they are assessing a person’s credit worthiness when they have no defaults or court actions but have a number of late payment recordings on their credit file? Personally I fear this will be just another reason for them to decline an application.

Given how easy it can be to be a week late with paying an account this has the potential to affect a lot of people and possibly make securing credit even harder than it already is.

What will be interesting is how will this information affect a persons credit score, in short a credit score is a number recorded on a credit report that is designed to represent a persons credit risk profile.  This score is affected by a number of things such as changing employment, moving address and of course negative events such as payment defaults or court actions.  

Even though credit reporting agencies are stating that a late payment recording is not going to carry the same magnitude as an event such as a default or court action, it will almost certainly have the potential to lower a credit score and a low credit score generally means big trouble for people when trying to raise finance.

My fear is that this will be yet another way for people to end up with a bad credit file.

I feel this situation could end up being quite similar to issues with credit enquiries where one or two listings may not prove to be a problem however once someone has a few listings over a relatively short time period they may really start to struggle, finding themselves being refused credit even though they have no actual defaults or court listings recorded.

Credit providers need to add some logic to assessing risk and understand that there is a world of difference between someone that had been late on a few accounts (as little as a week) and someone that has recorded payment defaults on their credit file.  Unfortunately as most credit providers credit scoring systems are fully automated this type of logic can sometimes be found wanting.  

How this new policy affects people is yet to be seen and credit providers will need to think very hard about how they are going to use this information to assess risk as while there no little doubt credit providers use credit reports as a culling or sorting method, they cannot say no to everybody.

Here is a link to the Today Tonight story covering this topic. Click here

 John Dickinson

Clean Credit

Concerning changes to credit reporting laws by John Dickinson

The short answer is yes, in some situations an unpaid default can be removed from a credit file however there are a number of things to consider before approaching a credit provider to remove an unpaid default.

The most important consideration is giving our clients the best possible chance of a successful outcome.     

Generally speaking adefault  can only be removed from a credit file on the basis of error, fault or legal technicality being found with the listing itself or the process the credit provider followed prior to recording the event. In other words if a default is unpaid and it is proven the necessary steps were not followed by the credit provider prior to listing the listing needs to be removed, even if there is money outstanding.

It is very important to note  the removal of an unpaid default does not necessary expunge the debt.  The credit provider may still pursue the debtor for the recovery of the debt in accordance with the statute of Limitations which allows a credit provider to pursue a debt for up to six years. If a Court Judgment has been awarded this term is extended to twelve years.

If a credit provider has to remove an unpaid default due to an error or legal technicality they will often become highly motivated to protect the debt and will often become quite aggressive in their recovery activity.  this could involve passing the debt on to a collection company or commencing legal proceedings in order to secure a court judgment, naturally such activity could prove troublesome for a consumer and it would be advisable to avid this if possible.

For this reason unless there are special circumstances such as fraud we always recommend our clients incorporate the payment or settlement of the debt as a part of the default removal process.

There are two reasons for this.  Firstly a credit provider is more likely to be amicable and compliant to our requests if they feel the debt is to be rectified as a result of our credit repair activates. Secondly our client can rest assured that the default and the debt will be resolved so they will not need to worry about anything popping up at a later date to course them trouble.

With older debts there is often a genuine opportunity to negotiate and reduce the amount owed, in some cases significantly.  Clean Credit has its own debt negotiation area known as Clean Credit Debt Resolutions.  This company is actively involved in arranging reduced payout figures for our clients, in some cases we have saved our clients up to 80% however reductions of 40 to 60% are common.

If you have an unpaid default and would like to have this removed from your credit file I feel it is important that you also consider the payment or settlement of the debt as this will give you the best possible chance of success and ensure there are no nasty surprises down the track.   

John Dickinson

Clean Credit  

Can an unpaid default be removed from my credit file ? by John Dickinson

This is a question we are often asked.  I can understand that from a consumer’s perspective it must seem confusing that information can differ between credit reporting agencies, after all, aren’t credit reporting agencies meant to only record accurate information.  

To answer this question let me first touch on Australia’s credit reporting agencies.  The largest of these is called Veda Advantage and most credit providers utilise the services of this company when assessing the risk profile of an applicant.  The second credit reporting agency is known as Dun & Bradstreet and although a very large international company there credit reporting activities are still small when compared to Veda Advantage, having said this they are increasing market share and I imagine they will rival Veda Advantage in the future.  It is fair to say that these two companies dominate the credit reporting industry in Australia and the vast majority of credit providers consult with one if not both of these companies.

It is important to note that these two companies are completely independent of each other and they do not share information, in fact our privacy laws would prohibit the transfer of information between these companies.

In order for a credit provider to access a person’s credit file they must first be an active subscriber of a credit reporting agency.  Not all credit providers subscribe to both credit reporting agencies.  The majority of credit providers subscribe to Veda Advantage while many major lenders such as banks subscribe to both Veda Advantage and Dun & Bradstreet.

Although fewer in numbers some credit providers use Dun & Bradstreet exclusively.

Let’s suppose that a credit provider subscribed to Veda Advantage and not Dun & Bradstreet, when they entered information into a persons credit file they would be recording this in their Veda Advantage credit report only. Using this example if another credit provider was to view this persons Veda Advantage and Dun & Bradstreet they would see different information and this can course confusion for all concerned.

The same situation can happen in reverse should the credit provider only subscribe to Dun & Bradstreet.

It is important to keep in mind that the information contained in a credit file is only as accurate as the credit provider that records it.  Credit listings are recorded by the credit provider directly and the credit reporting agencies have little ability to verify the accuracy of this data, as you can imagine this situation can lead to many inconsistencies and errors with credit listings and there is no doubt that there are many people suffering due to faulty or inaccurate credit listings, this is particularly evident with payment defaults.

At Clean Credit we see many examples of inconsistent information in credit reports and are well aware of the problems people face as a result.  The good news is many of these situations can be rectified by having  questionable credit listings removed from peoples credit files.

John Dickinson

Clean Credit 

Why can information differ between credit reporting agencies. by John Dickinson

We are often asked about the problems with Australia’s credit reporting platform and comment on how many incorrect or faulty credit listings there really are.

I feel a good way to relay how big this problem really is is to reference the outcome of a survey conduced by Choice.

According to Choice there are currently more than 16 million Veda Advantage credit files in Australia and more than one in three may have errors or inconsistencies. That represents a lot of people being potentially inappropriately treated by credit providers.

Unfortunately most credit providers do not have the time or resources to work out what credit listings are right and which ones are wrong and due to this if a negative credit listing is noted an application will most likely be declined regardless.  I am sure you will agree that this outcome is far from fair for people that are the victim of incorrect or faulty credit listings.

Even if the consumer calls the credit provider that declined the application on the basis of an incorrect credit listing they are unlikely to change the outcome as most credit providers utilise computerised credit scoring systems so once a decision has been made its final.

Why is the problem so huge?

To answer this question it is firstly important to understand the role of Veda Advantage and Dun & Bradstreet.  As credit reporting agencies their core function is to record and sell information.  Credit reporting agencies are naturally concerned that they are holding accurate information however as this information is entered directly by credit providers and there is little if any screening of this information prior to it being recorded the credit reporting agencies have limited ability to verify the validity of the information they hold, the saying rubbish in rubbish out is relevant here.

Once a credit provider is a subscriber of a credit reporting agency they are free to input information at will and it is due to this point that much of the information contained in credit files is not correct.  It is interesting that there seems to be little training by credit reporting agencies with new subscribers on their obligations when entering credit information. I find this odd as subscribers of credit reporting agencies have a genuine responsibility to ensure the information they are recording is 100% accurate as a negative credit listing has the potential to negatively impact on a persons financial future for years.

It is my view that not all credit providers take this responsibility seriously enough.

At clean credit we often talk to credit providers that have entered negative credit listings such as defaults that are not correct or they have not followed the necessary process prior to recording the listing.  What is particularly disappointing is the attitude of many credit providers when confronted with this fact.

Many are clearly not familiar with their legal obligations or disappointingly do not seem care that the law must be followed and feel they are able to do whatever they want.

To me it’s a little like handing someone a loaded gun but not showing them how to properly fire it.

It is clear that Australia’s current credit reporting platform is far from perfect and it is disturbingly easy for people to wrongly end up with a bad credit rating however there is good news on the way.

There are a number of proposed positive changes to our credit reporting structure due to take affect during the course of 2013.  While not all proposed changes will end up as new policy I for one feel that anything that helps protect people from incorrect credit listings is a move in the right direction.

John Dickinson

Clean Credit  

Faulty credit listings, how big is the problem really? by John Dickinson

John Dickinson is the managing director of Clean Credit Pty Ltd, A company specialising in the restoration of credit reports via the removal of negative credit listings such as payment defaults or court actions. 

Mr Dickinson has over 20 years experience both nationally and internationally in the property and financial markets and enjoys a comprehensive understanding of these industries.   

John has extensive finance experience ranging from prime residential lending via a posting at the Commonwealth Bank of Australia through to large scale commercial and development finance transactions.

A prior director of a significant non-bank lender, John was responsible for the architecture and development of a funding line that was the first of its kind in Australia. John was instrumental in the acquisition of a dealer’s licence under the Managed Investments Act with the Australian Securities and Investments Commission along with the preparation of an active Product Disclosure Statement for the purpose of capital-raising for the company’s lending activities.  It was at this time that John became aware of inconsistencies with Australia’s credit reporting platform and how  people are often wrongly affected due to faulty or inaccurate credit listings.  John recognised the requirement for a professional and ethical credit repair service and commenced Clean Credit Pty Ltd.         

John has high level exposure to this market sector and has extensive knowledge and understanding of the laws surrounding credit reporting, John is often consulted by the media to comment on this topic and is considered by many to be a leading authority on the subject.  Mr Dickinson  was the foundation member of the Credit Repair Institute of Australasia, an organisation dedicated to customer protection and best practice principles within the credit repair industry.

Follow John in Google+

About John Dickinson by John Dickinson

Clients often ask us about credit scores and what a credit score needs to be in order to secure finance.  This is a difficult question as every credit provider has their own thoughts and policies with regard to lending guidelines.

With this in mind we are able to offer a guide of where we would like to see people’s credit scores in order for them to not experience difficulties when trying to secure credit.

Before I cover this it is important to understand the basics of a credit score.  A credit score is a number that is displayed on the first page of a credit file.  This number represents the risk profile of an applicant to a potential credit provider.  Other than a bankruptcy or formal debt agreement the lowest credit score a person can have is -200 with the highest being 1200, the lower the credit score the higher the risk is considered to be.  A credit score can be affected by a number of factors such as a change of address, change of employment, credit applications or enquires and of course negative credit listings such as defaults, serious credit infringements and court Writs and court judgments.  Once a credit score falls below a certain level it can be very difficult for people to secure credit.

Typically a credit provider will look at three things on a credit report when assessing someone’s credit worthiness:

1)      The credit score

2)      Past credit applications / enquires

3)      Negative listings such as defaults etc.

While credit scoring has been in existence for some time in other parts of the world such as the United States and Europe it is a relatively new concept in Australia.  The idea of a credit score is quite simple; it is designed to provide a credit provider a tool to quickly assess risk.  It is now a situation where many credit providers simply trigger their automated credit systems to react to a credit score, in other words if someone has a credit score of X they will get approved were if they have a score of Y they won’t.

With this in mind let’s cover my thoughts about minimum credit scores.  Below a credit score is a colour coded graph. This graph starts red and ends green, remember the lower the score the higher the risk so the further into the green zone the better.  While only a guide the green zone starts at approximately 600 so we would always like to see people’s credit scores in excess of 600.

While a score of 600 or more does not in itself guarantee credit will be approved it is clear that a credit score of under 600 will most definitely represent a real problem for people trying to gain finance approval.

If someone has a low credit score that has been coursed by the recording of negative listings such as payment defaults the path to a higher credit score could be achieved by the removal of the offending negative listings.  For more information I would recommend engaging the services of a professional credit repair company such as Clean Credit Pty Ltd.

John Dickinson

Clean Credit Pty Ltd

Australia’s most respected credit Repair Company.

What should my credit score be ? by John Dickinson

Clean Credit has launched a debt negotiation service called Clean Credit Debt Resolutions

Clean Credit is known as Australia’s leading credit repair company, over the years we have helped hundreds of people repair their credit files and move forward with their lives.  Until now our service have been limited to helping people remove negative credit listings such as defaults and judgments from their credit files.

As a part of this process it is common for people to approach our company to help them remove a negative credit listings to also have unpaid creditors.  We often explain to people that even though from a purely legal standpoint a default can be removed even if unpaid given the listing  is found to be faulty or inaccurate the truth is most successful outcomes tend to involve the settlement of the account in some form.

Given we are acting for our clients from credit standpoint this is often the perfect time to negotiate with the creditor in order to achieve a reduced payout.  When we approach a credit provider about removing a negative credit listing such as a payment default it is common for the event to be historic.  In some cases defaults are recorded for up to seven years so it is not uncommon for a debt to be years old also.   In this example many credit providers may have either passed the account to a collection company or internally written the debt off.

As we are used to dealing with credit providers and in many cases have close relationships with them we have been successful in arranging significant reductions for our clients, in some cases these reductions have been as high as 80% however savings of 40 to 60% are common.  Our biggest successes are with unsecured debts such as credit cards debt, personal loans, business loans and trade creditors etc., as a rule of thumb facilities such as mortgages and other secured debts are more difficult as the creditor has an avenue for the recovery of the debts via the possession and sale of the asset.

Below are some of our recent savings for our clients.

Our fees are this service are completely performance based which means that if we are not successful in saving our clients’ money no fees are payable.

There is a real benefit in settling unpaid accounts as left unattended the situation has the potential to spiral out of control with the credit provider or a collection company commencing legal action, other than the cost associated to defending such as action a court judgment will extend the statute of limitations period to 12 years.

John Dickinson

Clean Credit

Clean Credit adds debt negotiation to its services. by John Dickinson

We were recently featured on channel seven’s Today Tonight; the topic was how credit applications can damage people’s credit files.

Click here to view story

It was interesting that despite mostly positive feedback we did experience a credit repair company demanding an apology as in their opinion the story was inaccurate as they felt genuine credit enquires could be removed from a credit file.

I am unsure what would motivate another credit repair company to make such a bold comment however I feel I need to set the record straight.

The bottom line is a genuine credit enquire or application cannot be removed from a credit file, period.

The key word is genuine.  Credit repair is all about the law and any credit listing including enquires can only be removed on the basis of fault or error.

There are some rare situations were a credit enquires may be faulty and therefore could be removed from a credit file, these situations include.

1)                 The credit provider did not have the necessary authorisation to conduct the enquire

2)                 In the case where a credit provider had conducted multiple enquires for the same person for the same facility, in this case enquires can be amalgamated into one listing.

3)                 In the case of identity theft were the credit provider has conducted an enquire on the wrong person.

4)                If the information contained within a credit file regarding an enquire is not accurate or complete

As you will appreciate, when compared to the number of genuine applications being made by people each day the examples above represent a very small percentage.  I feel it misleading for a credit repair company to advertise they can remove credit enquires when in fact they know they will only be successful with a very small percentage. In my opinion they are prying on people and in many cases taking money from them wrongly.

My personal feelings are some credit repair companies continue to tell people they can help them to have enquires removed from their credit file as they are more concerned with income than actually helping people.

Although it can be a very bitter pill to swallow the fact is there is little if anything that can be done to help people that have lowered their credit score due to making credit enquires.  Time is the only cure, in same cases people will have to wait years before their credit score recovers sufficiently for them to once again be eligible to secure credit again.

John Dickinson

Clean Credit

1300 105 210

Can credit enquires be removed from a credit file ? by John Dickinson

There are over 14 million credit files in Australia and these contain over 3 million negative listings (Veda Advantage 2008).

Even one negative listing on a credit report has the potential to affect people’s ability to secure credit for years.  The affects of this can be severe and wide spread, from the collapse of a business to family breakdowns, not being able to secure credit into today’s world can have disastrous consequences.

The good news is many negative listings can be permanently removed from a credit file, like they never existed.

Having negative credit listings such as defaults removed from a credit file can be achieved by identifying faults and errors with the credit listing or the process followed by the credit provider.

Few people realise that credit providers are bound by law to follow a very strict process before they are able to record a negative credit item.  This process includes

• Making sure the account is sufficiently in arrears before the commencing  recovery action
• Providing sufficient notice periods to the debtor
• Issuing correctly structured demand letters to the debtor
• Making sure all disputes are resolved prior to recording the event with a credit reporting agency
• Making repapered attempts to contact the debtor on all known forms of communication in the case of some credit listings.

Knowledge is the key, the key to repairing a credit file is having knowledge of the laws and legislation surrounding credit reporting and an understanding the process a credit provider must follow, armed with this information many negative credit listings can be permanently removed from a credit file.

Unfortnitly there is no magic built bullet with credit repair however it is common for find errors and inconsistencies with negative credit listings and given this is the case they can be permanently removed from a credit file.

John Dickinson

Clean Credit Pty Ltd

What is credit repair? by John Dickinson