Credit repair is a term used to describe the process of improving an individual’s credit report. This can be achieved through the removal or adjustment of incorrect negative credit listings from a person’s credit file. Cleaning up these listings may improve a person’s credit score.
Credit repair is a possibility in Australia. But first, it’s important to understand what could have damaged your rating in the first place. Learn how does credit repair work below.
What is a credit file?
Your credit file is a detailed record of your financial history. It’s used by lenders to judge your ability to manage loans and repayments. Your file contains your personal information as well as any details of loans and credit cards you have held.
People with scores between 0 and 550 are likely to have a weak or below-average credit history. This means that your credit report may include evidence of:
- Late payments or defaults.
- Multiple credit inquiries in a short period of time.
- Overdue accounts.
- Other negative listings.
If you have poor credit, you’ll struggle to get approved for a credit card. You may also be given higher interest rates when you apply for a loan. With a better credit score, a person has a greater chance of securing a loan. This is because they’re deemed as more responsible borrowers.
How does credit repair work in Australia?
After getting in touch with a suitable company, they will be able to investigate and assess your credit file. Following this, they will request information from credit providers. This includes copies of any notices and file notes, to investigate whether or not negative listings have been placed correctly.
Assuming that you do have negative listings on your credit file, then it’s time to get these files removed. This process involves your cases being disputed.
This can be done in a number of ways. The easiest being where creditors have made errors/inconsistencies within your file. People are often burdened with negative listings when they are actually victims of the correct procedures not being followed. In this instance, a credit repair team can quickly and easily come in and make a case against these errors to get your negative listings removed.
These inconsistencies can include:
- A ‘final bill’ not being sent to the customer at least 44 days prior to listing.
- A default notice not being sent to the customer’s last known address at least 14 days prior to the default listing.
- An account not being at least 60 days in arrears before a negative credit listing is made by a credit provider.
If there are no inconsistencies to report, then things can get more complicated. This is what separates the good and the bad credit repair companies in Australia.
Watch out for…
Unfortunately, there are many companies out there who are not legitimate about helping to repair your credit. Many of these companies will take your money regardless of the outcome. Therefore, it is important to find a company that you can trust.
Many companies have low success rates, simply down to the fact that their team is not capable of contesting defaults and other negative listings effectively with credit providers. In addition to this – many companies do not give your money back if they are unsuccessful in their dispute.
Clean Credit boasts over a 90% success rate and a NO WIN NO REMOVAL FEE policy. This means that if unsuccessful in removing negative listings, you get your removal fee back.
Check out our Trustpilot reviews and trust us to help with your credit repair.
Always try to avoid bad credit in the first place – make repayments on time, avoid making multiple credit inquiries, avoid defaulting on payments, pay debts off in full when possible.