I recently read an article in finance industry magazine concerning some of the changes to the laws surrounding credit reporting, namely the provision for a credit provider to list a late payment in as little as one week. Another credit repair company had made comment that they felt this was potentially course for concern, this comment was countered by a legal firm suggesting that such comments could been seen as “scare mongering” by credit repair companies and the subject changes to legislation could prove to be positive given they will it will help credit providers to better determine the risk profile of a potential borrower. While I am in no way suggesting that all the changes to the credit reporting laws are negative it must be said that many comments on the positive impact of this new legislation are being made by people who have little if any personal experience of being the victim of a negative credit listing. If they had I feel confident they would be the first to scream injustice and demand the situation be rectified immediately.
Let’s take a look at the ability of a credit provider to list a late payment recording on a credit file if an account is paid as little as one week late. I am sure that most people, including those who criticise the credit repair industry would have been a week late paying an account at some time in their life, now imagine if the event was recorded as a “late payment” on their credit file and that listing was the reason a credit provider would not approve their application for finance. I am guessing if affected in this way the same people that suggest the concerns voiced by myself and others within the credit repair industry are merely “scare mongering” would change their option very quickly and deem the situation an outrage.
It is important to note that I am in no way suggesting that all the changes to credit reporting laws are bad, in fact I am in support of the majority of them. Having said this I am very concerned about the potential for a credit provider to list a late payment in as little as one week. I feel there are many situations were such a listing could be made inappropriately and to the detriment of a consumer, the problem is once such a listing is recorded the damage is already done and the consumer is considered guilty and judged accordingly by credit providers.
As the director of a credit repair company, Clean Credit Pty Ltd, I see how many credit listing such as payment defaults are recorded incorrectly. Keep in mind that a payment default listing can only be recoded after an account is more than sixty days in arrears, I can only imagine the potential for error when a late payment listing can be recorded in as little as one week.
Only time will tell how this story ends however in my option some of the changes to credit reporting are very much course for concern and not merely scare mongering.