Award winning broker turned advocate for credit reporting accuracy reveals the surprise bad credit stopping Aussies refinance.
8 November 2012
Australians are looking to refinance at a rate of knots, but a consumer advocate says some home owners are discovering they have bad credit history when they attempt to refinance, despite believing their repayment record has been impeccable.
Frugality sparked by the GFC and improved banking competition have pushed the number of refinanced properties to a 20-year high.
Consumers have been urged to move their mortgage away from the 'big four' banks as a response to the raising of home loan rates, but a consumer advocate warns that many home owners may discover they have bad credit history, even if they think their repayment history has been impeccable.
Former broker turned consumer advocate for credit reporting accuracy, Graham Doessel CEO of MyCRA Credit Rating Repairs, says it is essential that all existing home owners check their credit file is accurate before making an application for finance.
"For many home owners it may have been years since they applied for major credit so it is important to know if their good name is compromised in any way before they make an application,"
He says regardless of whether people have been diligent payers, creditors can and do make mistakes with credit reporting.
"People can have many errors thrust upon them unknowingly - bill mix-ups, computer errors and human error can all contribute to these surprise black marks. Unfortunately any black mark on your credit rating will be an automatic decline with most lenders," he warns.
"Creditors don't always comply with the law, and sometimes they make mistakes.”
Approximately 63% of the clients who request credit rating repair through MyCRA Credit Rating Repairs have defaults, writs or Judgments which are listed in error on their credit file.
"We have clients who are facing identity theft; some are caught in issues over separation from their spouse; some have been disputing the bill which went to default stage and many people are just victims of the fallout from inadequate billing procedures - wrong names, wrong addresses, human and computer errors," Mr Doessel says.
Under current credit reporting legislation, consumers are entitled to obtain a copy of their credit report from the credit reporting agencies once a year.
People need to contact all the credit reporting agencies to request their report - as creditors have access to 3 agencies within mainland Australia and 4 in Tasmania. The report must be provided to them in writing within 10 days of the request.
He says listings are not removed by creditors unless the file holder can provide adequate reason and lots of evidence as to why the listing should not be there.
"Credit repair requires knowledge of the legislation, lots of evidence and perseverance. But for those people whose financial freedom is hindered because their credit file contains errors, it is a point worth fighting for," he says.
Despite credit file errors - there may be other reasons refinancing is not an option. Currently many home owners are facing falling property prices. Negative equity can halt any refinancing plans.
Mr Doessel says home owners also need to also calculate the in and out fees that may be present on any new loan to ensure the switch is really saving them money.
People who want more information on credit repair, or who wish to obtain a free copy of their credit file can contact MyCRA Credit Rating Repairs on 1300 667 218 or visit their main website www.mycra.com.au.
Graham Doessel - CEO Ph 3124 7133
Lisa Brewster - Media Relations Ph 3124 7133 firstname.lastname@example.org
246 Stafford Rd, STAFFORD Qld
MyCRA Credit Repairs is Australia's leader in credit rating repairs. We permanently remove defaults from credit files.