Follow the journey of a client who needed a loan, but had a bad credit rating. The steps towards credit repair are easier than you might think. Here, we tell the story of what steps to take if you find yourself with a bad credit history.
Meet Louise, a hard-working single mother of 2. Louise had a stable admin job which helped her to support her family and pay for her mortgage. She was organised with her money, ensuring that she always budgeted carefully to cover any unexpected costs and made sure she always paid her bills on time. While Louise was sensible with her money, she also liked to treat herself and her children from time to time. Trips to the cinema were frequent, shopping sprees weren’t uncommon and holidays abroad were a yearly occurrence. Other than her mortgage (of 5 years), Louise had never borrowed money or taken out a loan from a bank or lender before.
Louise had built a financially comfortable life for herself and her kids, but she couldn’t predict what was to happen next.
Losing Financial Control
Louise was driving to the grocery store when her car suddenly started to shudder and came to a halt. She called a mechanic to take a look and 3 days later, she was horrified to hear that her clutch had burnt out. Slapped with a bill of $3,000, Louise had to dig into her savings. Fortunately, she had enough saved thanks to her careful budgeting. However, she was out of emergency cash. 2 weeks later, Louise’s youngest son came home full of excitement because his school had announced an upcoming ski trip for his year group. Her eldest had been on the same trip 2 years prior so she felt obliged for her youngest to get the opportunity too. It needed paying for in full in 90 days-time. Since she had spent any spare cash to her name, Louise decided it was time to take a loan out.
The next day she went to her bank – NAB. After applying for a personal loan, she was upset to hear that she had been rejected. She then tried a private lender but came to the same conclusion. Confused, worried and upset, Louise checked her credit score for free on Experian. To her amazement, in front of her was a score of 540.
What Is Your Credit Score Out Of?
Each credit bureau has a different rating system. Experian ranks your score between 0 and 1,000.
800 – 1000 = Excellent
700 – 799 = Very Good
625 – 699 = Good
550 – 624 = Fair
0 – 549 = Weak
After discovering that her credit score was within the ‘Weak’ band, Louise couldn’t quite believe her eyes.
What To Do When Your Credit Score is Low
With only a mortgage to her lending name, Louise was convinced that there must have been a mistake. Louise needed reliable help fast. Her son’s ski trip needed paying for soon, but she couldn’t get a loan. So, Louise asked some of her friends for advice on what to do next. One friend suggested that she had once contacted a company that looked into her credit file for her and attempted to repair her credit. However, this particular company charged high fees and never found any answers. Instead, they claimed that they had tried, yet failed to repair her credit file and she never got her money back. This made Louise nervous and sceptical of these so-called credit repair companies.
Just as Louise was ready to give up and face the dilemma of breaking the bad news to her son, or break the bank getting a bad credit loan despite the high-interest rate, she received a call from another friend. This friend had told her all about her experience with a credit repair company that had changed her life and encouraged Louise to give them a try. Her friend had her bad credit rating completely cleared and restored in just 32 days! Louise needed to fix her credit rating fast, so decided to trust her friend. Despite being sceptical of credit repair companies she visited the website of Clean Credit.
The Credit Repair Steps
Louise immediately noticed that Clean Credit had over 70 5* reviews on Trustpilot, a 97% success rate and they also a ‘No Removal No Fee’ guarantee!
Starting to feel more confident, Louise filled out a contact form. A short 3 hours later, Louise was surprised to receive a call from one of the Clean Credit specialists. They were patient and comforting on the phone and reassured her about the credit repair steps. They advised her that in order to proceed, they would have to take a look into her credit file to break down what was providing her with a poor score. This report is available at a fee via the Experian website. However, Clean Credit offered to go through the file with Louise still on the phone at this same small fee. Louise paid the fee and within seconds, Clean Credit was looking into her file. They could see a default on there, along with 2 credit inquiries.
After explaining what each of these terms meant, Clean Credit went on to discuss the next steps of credit repair. This is to start working on your file and removing your negative listings, in order to restore your credit health. While still on the phone, they sent Louise an application form via Email which required her signature and bank details. She filled this out while still on the phone and this meant that Clean Credit could start on her file right away.
They made it clear that the credit repair process usually takes between 20 – 60 days and if they were unsuccessful with any removals, then she would receive a refund for the removals in question.
What is a Default?
A default is listed on a file when someone fails to make an agreed payment on time. Louise was confused because she never knowingly missed a payment before. Clean Credit reassured her that it is common for people to wrongly receive a default on their file.
This default had been handed out by her telephone provider and Clean Credit helped Louise to conclude why. After moving house 2 years prior, her phone provider continued to wrongly send her phone bill to her previous address despite the fact that Louise updated her address. Noticing that the money for her phone bill hadn’t come out for 2 months, she called up and cleared any debts to her name right away. However, in that time, her phone provider had already slapped her with a default without her knowing. A default stays on your file for 5 years from the date it was issued. This means that without credit repair, it would take another 3 years for the default to be cleared from her file.
What is a Credit Inquiry?
Each time you apply for finance with a bank or private lender, you receive a credit inquiry on your file. A credit inquiry tells other providers that you have recently requested to borrow money from a credit provider. This can make them wary of providing you with finance since you might have lots of other debt to your name. Consequently, you could be less likely to pay them. Because Louise had recently tried to take out a loan with both her bank and also a private lender, she had 2 credit inquiries to her name. A credit inquiry remains on your account for 5 years.
How Much Does Credit Repair Cost?
Clean credit charges a $330 application fee which covers any paperwork or other expenses that the Clean Credit specialists might encounter. After this, it costs $880 per removal. If a client has court judgments on their account, then it costs $220 per court judgment removal. Clients can choose to pay their application fee in full or via a payment plan. Additionally, they can also choose to pay their removal fee’s in full or via a payment plan.
So, what was Louise’s credit repair outcome?
Within just 30 days, Clean Credit had successfully cleared Louise’s credit file and she had a good credit score once again! This gave her 60 more days to make her son’s ski trip payment. Louise was also referred to a reputable private lender called The Australian Lending Centre, who were able to provide her with the personal loan she needed with a low-interest rate.
The steps towards credit repair are simple and can be life-changing. Make sure to avoid the companies with bad reputations and stick to trustworthy ones, like Clean Credit. You can go from having a bad credit rating, to an excellent one in a matter of weeks. Don’t let your credit history drag you down. Fix your credit today and get the loans you need to secure a positive financial future.