Getting Ahead After a Credit Default

Even the smallest negative listing on a credit report can have devastating results when trying to secure credit. Given the current financial markets, many credit providers have become highly risk adverse and even one small credit issue such as a late payment on a phone account can make things very difficult for people to secure credit.

In Australia there are over four million negative credit defaults made each year, many of which are faulty or inaccurate and therefore contestable. The problem is in today’s market many credit providers use computer systems to determine if they will approve credit. The fact is that if a negative credit listing is detected, even if incorrect, the result is usually a decline.

Credit Default and The Consumer

If an application is declined due to a credit issue very few options are available to the consumer. This situation is often referred to as being in “credit prison.”  Unfortunately many consumers just accept the situation as they don’t know what else to do. This may be okay if the credit being applied for was for a new television or a couch, but what happens if the credit was for a business loan that was desperately needed or funds to pay school fees? The outcome for people who cannot secure credit due to negative credit listings can be severe and wide spread. Many people feel powerless in these situations and even though the negative credit listing may be completely inappropriate and incorrectly listed, they are treated as guilty until proven innocent. There are credit providers that will lend credit to people with a low level of credit impairment, however these facilities are often very expensive from both a fee and interest rate perspective, which is often counterproductive.

It’s disturbing to think that it can only take one small credit blemish to seriously affect someone’s ability secure credit. A simple credit default will remain on a credit file for up to five years and can literally stop people in their tracks for this entire time.

Credit Default and The Credit Provider

Credit providers are required by law to follow a process and ensure all listings are correct and accurate. Unfortunately not all credit providers follow these processes or are unaware of their obligations when entering a negative listing on a credit report. As a result many people suffer financial hardship for years.

Many credit providers utilise the services of debt collection companies but the fact that the information passed onto these debt collection companies is often incorrect seems to be unimportant to them. In many cases people are aggressively pursued by debt collection companies even if the information they are relying on is grossly misinformed or if the debt itself is not actually theirs. It is a sad fact that people have paid money to debt collection agencies even if it was not their debt just to stop the constant harassment. This is a terrible situation but in many cases people just don’t know where to turn to and fold under the pressure.

Credit Default and Credit Repair

A large number of negative listings can be challenged and removed permanently from a credit file.  It’s all about protecting people’s rights under the law and applying the relevant State and Federal legislation to the credit reporting process. Just as you should not be locked up for a crime you did not commit, people should not have to suffer financial hardship due to a faulty or inappropriate credit listing. The difficulty is there is very little information or resources available to the general public on this topic and therefore without an in-depth knowledge of the law and the credit reporting process, the ability to successfully challenge a listing can be very difficult indeed.

The good news is that Clean Credit specialises in helping people challenge contestible credit listings and in many occasions have these permanently removed from their credit file. Such assistance has the potential to turn people’s lives around and get them back on the road to financial success.

If you are in “credit prison” due to a faulty or inappropriate listing there is help at hand. Credit repair can help these negative listings. Find out more about our credit repair services