It is a lot easier to get a new loan or credit card when your credit score is good.
But what can you do if your score is looking worse for wear?
Credit repair can help improve your score. Read on to learn how it works.
What is Credit Repair?
Credit repair is a term used to describe the improvement of an individual’s credit report. This is achieved by reviewing your credit report and investigating negative listings that may be affecting your credit score. Credit repair involves attempting to have negative listings removed from your credit report.
The Advantages of Credit Repair
If a listing is found to be incorrect, and is successfully removed from your credit report, it will no longer form part of the calculation that determines your credit score. When negative listings are removed, your credit score will improve. You will have a higher chance of having your future loan applications approved, and obtaining a lower interest rate.
Who Can Do Credit Repair?
If you have the time, you can perform “do it yourself” credit repair, or you can contact a credit repair company to do the work for you. You can get a FREE assessment for credit repair from Debt Negotiators by calling them on 1300 351 008.
What Credit Repair Companies Do
Credit repair companies provide a service to assess your credit report, investigate negative listings, and do the work of refuting incorrect negative listings. They act on your behalf and liaise with credit reporting agencies, creditors, and negotiate court proceedings where necessary.
While anyone can perform credit repair, credit repair companies are experts in credit legislation, with established creditor relationships.
How Much Credit Repair Costs
It is free to perform credit repair yourself. If you employ a credit repair company to complete credit repair on your behalf, you will be charged a fee.
Before applying for credit repair, research credit repair companies and ask what their fees are, and what service is being provided for the quoted price. It is important that you understand what you are agreeing to pay, before applying for credit repair with a company.
The Credit Repair Process
There are a number of steps to complete in the credit repair process:
- Apply to the three credit reporting agencies for a copy of your credit report. It may take up to 30 days to receive your report, though usually it is only a few days.
- Read your report thoroughly and look for any incorrect information. This includes arrears, defaults and other credit infringements, credit applications, Debt Agreements and credit report requests. Any of these items may be negatively affecting your credit score. Make note of any inaccuracies
- If a mistake has been made by the credit reporting agency (such as your personal information or a debt being listed twice), you can contact the agency to have this information corrected.
- If a creditor has reported information incorrectly to the agency (such as listing you as being in credit default, a default being listed while the debt was in dispute, an account was created in error due to fraud by a third party), you should contact the creditor and ask for it to be removed. If they agree that the listing is wrong, they will ask the credit reporting agency to update your report.
If you are not satisfied with the response you receive, you can contact the appropriate Ombudsman to make a complaint, via the Australian Securities and Investments Commission (ASIC) website.
You may also want to consider obtaining financial advice before taking any steps to repair your credit.