A default on your credit report listing is bad news when it comes to buying a new car, getting your foot on the property ladder, or finding funding to start up your own business. Without proof that you can manage your finances properly, you’ll find that lenders will be reluctant to give you a loan with a good interest rate or a credit card, which can be handy when you need a little extra cash to realise your dreams.
Unfortunately, times have been tough across the globe in recent years, and many people have been hit hard financially. If you’ve been unable to pay back your loans or defaulted on direct debits, you’ll probably find yourself in need of credit repair services to help with credit default removal or improving your overall credit score. Thankfully, help is at hand. In this article, we’ll explain the ins and outs of credit repair and what you can do to fix it if you happen to find yourself in this type of situation.
What Is A Credit Default?
First things first, let’s establish what a credit default is. Simply put, a credit default is a listing against your name representing any overdue debt that has not been addressed. Any payment that amounts to $150AUD or more and has been left unpaid for a period of over 60 days could potentially be listed as a default on your credit report. Any default credit listing negatively impacts your credit history and will damage your credit score. A default can stay on your credit file for up to 5 years.
How to Clear a Default on Your Credit History in Australia
Regardless of your situation, it is always wise to know where you stand with regards to default credit so there are no nasty surprises that need to be addressed when you come to take out a loan or sign up for a credit card.
1. Get A Free Credit Report
The first step towards acknowledging your financial standing and getting to grips with any credit defaults against your name is to access a credit report.
Anyone who has ever applied for a credit card or loan will have a credit report, and you have the right to get a copy of yours once every 3 months at no cost. Regardless of whether you are planning to access any form of finance, getting a copy of this report at least once a year is a good practice to get into.
You can contact credit reporting services such as Experian, Ilion, and Equifax to access your free credit report. Usually, the credit report will be available online within a couple of days.
2. Work Through Credit Report to Find Any Defaults
Once you’ve got your hands on your credit report, you are faced with the task of going through the information meticulously and taking note of anything that doesn’t look quite right. Administrative mistakes are common and financial institutions are not immune from this. Credit defaults being reported twice or incorrect information about payments are commonplace. There are also more serious issues that could be linked to identity theft, which is why you really need to go through the report with a fine-toothed comb.
3. Confirm the Validity of the Listed Credit Defaults
Although analysing your credit report is time-consuming, it’s important to put the effort in to ensure all the credit default listings are correct, including the length of time the money was overdue.
You will also need to ascertain whether you’ve been properly informed about these unpaid debts from the creditors themselves. It is worth remembering that you may be able to dispute a default listing if you can prove you were not informed about it.
Furthermore, if you believe you did make the payment, regardless of whether it was overdue or not, you’ll need to go through your accounts to find proof of payment information to present in your defence.
4. Consult a Credit Repair Expert
If you find any discrepancies on the credit report, you’ll need to figure out who to inform about these errors to get a credit default removal. Depending on the nature of the mistake, you’ll either need to inform the credit reporting agency or the credit provider. Basic administrative errors, such as mistakes made on your name and address information or debts being listed twice, are likely to be the fault of the credit reporting agency, whereas more contentious issues, such as a credit default being listed while you were querying it is the type of issue, you’ll need to raise with the creditor themselves.
While clerical errors on the part of a credit reporting agency are usually fixed very quickly, discrepancies on the part of the creditor can be trickier to fix, as you’ll need to have the provider agree to the mistake before it is removed. In some cases, the dispute might not be straightforward, and if you are unable to come to an agreement, you’ll need to get the Australian Financial Complaints authority involved to conduct an independent dispute resolution.
While it is possible to navigate the process yourself, credit matters can be quite complex in some instances. Adding to that, the fact that having credit defaults, mistaken or not, listed against your name can be hugely detrimental to your financial future means getting these matters fixed up isn’t something that you’ll want to take casually.
If you feel uncertain about manoeuvring this terrain and have limited financial knowledge, a good option would be to seek the assistance of a credit repair expert. Just be sure you find a trustworthy credit repair specialist who has a solid record for advocating for their clients and achieving positive outcomes. Choosing a credit repair expert carefully is important because a dodgy service may end up making the situation worse and doing nothing more than adding to your expenses when things are already tight financially.
What to Do When the Credit Defaults Are Recorded Correctly
In the instance where the credit defaults listed on your record are correct, there is still a possibility the default can be removed. This is where you require the assistance of a credit repair specialist.
You can start by using your credit report as a tool for understanding your financial situation and using the information it provides to improve your credit rating. Bear in mind that there is no quick-fix solution for dealing with a poor credit rating, so you’ll need to commit to a long-term money management strategy.
The first thing to do is to make an action plan that’ll prevent your credit score from getting worse by avoiding any further defaults. Begin by drawing up a budget that takes account of all your essentials, such as rent, utilities and groceries, as well as regular debt payments, such as credit card repayments and loans.
This is also a good opportunity to review your credit cards. Many people mistakenly believe they need a credit card to build up a credit rating. However, in many cases, this just acts as a tempting source of easy money. To avoid frivolous spending, opt for credit cards with lower limits and more favourable interest rates and rewards.
Depending on the severity of your situation, you may also want to consider the use of a debt consolidation service which will help simplify your finances. Another option worth exploring if you have fallen on tough times is debt negotiation which could look at ways to reduce debts or have them cancelled.
The Final Word on Credit Defaults
Credit default notices might seem easy to put to the back of your mind when you are busy with other things. However, debts do have a way of catching up with you, often at the most inconvenient of times. The best way to avoid finding yourself in a financially tricky situation is to keep your finances in good order. However, mistakes are easily made, and these aren’t always your fault.
If you find yourself battling with having a credit default mistake removed from your record, help is at hand. Credit Repair Solicitors come highly recommended when it comes to providing honest and transparent advice to clients. As specialist lawyers, Credit Repair Solicitors have years of experience arguing for the cases of clients who are dealing with creditors’ mistakes. Thanks to the fact that they operate using a fixed-fee service, you can guarantee there will be no nasty surprises coming your way when you are trying to get on top of your finances. Also, for peace of mind, Credit Repair Solicitors provide an upfront no-obligation analysis to see if they can assist you.
So, if you need help to ensure your credit report is accurate and no erroneous credit defaults are standing in the way of a bright financial future, contact Credit Repair Solicitors today on 1300 004 912 — they’ll help you get your financial standing in order!