You may be surprised to learn that a large number of the knock-backs are unnecessary and a large number of the defaults are in fact listed incorrectly.
One of the fundamental issues is the design of our credit reporting system in New Zealand and Australia.
While the US and Europe have adopted a positive credit reporting system, such an event as an account being paid without incident are recorded offsetting a minor negative record.
Our system only records negative events, and whilst some credit providers are quick to list a default, they may be very slow in updating the listing to a paid status, which in turn could be misleading to a potential credit provider.
Adverse credit listings are on the rise and so too are errors made by credit providers, to the detriment of borrowers. Who is credit worthy and who is not?
The answer generally lies with the computer credit scoring systems used by the major lending institutions, but where does that leave the potential borrower who really does stack up in every other way?
Whilst some credit providers do follow the required procedures when listing a default, others seem to have little regard for due process. Unfortunately in these cases it is the consumer that really suffers.
The selling of debt to debt collection companies can also become a problem with regard to credit reporting protocol. I see many cases where the debt is listed many years after the event, and others where the wrong person is being pursued for a debt which does not belong to them.
There are many common disturbing problems that can occur with our credit reporting system, one being the problem associated with identifying fraud.
This problem can go undetected until such time that an individual needs to apply for credit.
Although these listings can be published without proof of the debt owed, the removal of such errors can be quite difficult and time consuming to be tackled on one’s own
The decision to employ experts to manage and rectify the problem becomes clear.
The industry of credit repair is highly specialised. In Australia this industry is unregulated, which means there is no Government legislation in place to protect consumers from shady operators.
Therefore it is very important that you choose your credit repair company carefully or you could end up paying hundreds or thousands of dollars and not have the result you are hoping for.
There is never a 100% guarantee on your default being removed, however your chances are far greater if you choose an experienced company with proven results.
Alicia Candido is Managing Director of We Fix Credit Pty Ltd, one of Australia and New Zealand’s most established credit repair companies. Visit www.wefixcredit.com.au or email Alicia at alicia@wefixcredit.com.au
