It is not cool in Australia to blow your own trumpet, right? But what do you do when you know certain competitors are failing to do proper investigations for their clients with credit impairments and your company continually picks up the pieces? To be frank, I am amazed that some client’s trust us at all after what they have been through.

Take Sam* who was referred to Repair My Credit Now! over a month ago with four overdue accounts on his credit file. They had all been sold to debt collectors. They were a personal loan with Bankwest (sold to Pioneer) for $39,000, a NAB credit card (sold to Credit Corp) for $4,700, another personal loan with Great Western Asset Management (sold to Panthera) for $7,865, and finally a CBA credit card (sold to Credit Corp) for $36,000.

credit-score-imageThe previous credit repair company had charged a large sum and had achieved one removal out of the four, which was now back on his credit file because the outstanding debt had not been resolved and so the company re-listed him. Basically this company had done nothing except take Sam’s money. He was in exactly the same position as when he approached the company.

Sam emailed me the paperwork from the credit repair company showing what had transpired on default removals which appeared to be nothing more than a cut and paste of the outcome of a Veda complaint which had been popped into a “Listings Cannot be Removed” letter to Sam. Yet, from the information provided by the client I immediately saw how a case could be successfully won, based on breaches of the legislation.

So this is how the removals transpired:

On 10/9/15 the CBA/Credit Corp default listing was removed because of an error. The debt was reduced from $35,860 to $28,700, to be paid over time.

Four days later, on 14/9/15 the NAB/Credit Corp default listing was removed because of an error and the debt was reduced from $4,700 to $3,800 (paid on removal).

2 days later, on 16/9/15 the GWAM/Panthera default listing was removed because of an error and the debt of $7865.68 was paid on removal (no reduction).

On 30/9/15 the Bankwest/Pioneer default listing was removed because of an error and the debt was reduced from $39,000 to $23,000, payable over time.

We received copies of Sam’s Veda and a Dun and Bradstreet reports confirming all the listings were erased (as Sam had told us that some listings were on both reports), and Sam, understandably, was over the moon.

I’m blowing this trumpet not to pat myself and my team at Repair My Credit Now! on the back but to give a shout out to people to avoid using credit repair companies that are not doing their job. It is unwise to expose yourself to low quality operators who simply take your money and do nothing.

Other poor practices we see are credit repair companies who sell you an advice pack so you can do the work yourself. We see clients who follow the instructions by sending letters to the credit provider/s who listed them, as instructed, and the credit provider says, no, there is no error. We won’t remove the listing/s. Often these companies send out advice packs because they have been banned from using the Ombudsman services, so they need you to do the work yourself because they are banned from doing all they can to help you.

You can imagine how quickly word gets around about being banned from the Ombudsman services and that complaints these credit repair companies make to credit providers are not taken seriously because the company has no avenue through the Ombudsman to enforce the complaints. Bad news.

Another is the credit repair companies that encourage you into a Part 9 debt agreement (effectively, bankruptcy) when this is not the best solution for you, and your debts could be more effectively negotiated. What these companies may not tell you is that once you have agreed to a Part 9 this action will be recorded on a public register (the National Personal Insolvency Index or NPII) for life. Any time you go for finance from that point on you will have to admit you are a bankrupt which will play havoc with getting finance approved.

Other credit repair companies are also high interest lenders, and recommend you take out a high interest loans without having done a proper investigation of the listings on your credit file. This is credit repair as click bait at its worst.

Credit repair companies who offer high interest loans also put an inquiry listing on your credit file. To have the name of a well-known credit repair company on your credit file is a huge red flag to lenders and increases the chance that your loan application will be rejected.

Other credit repair companies use a no win no fee model to cherry pick what they regard as easy listings to erase on your credit report, leaving the difficult listings (those that affect the credit score most dramatically – like banking and finance defaults or judgments) on the credit file. Of course this will mean you probably won’t get a low interest loan. Of course they will tell you that their investigation has proved the hard listings were correct and couldn’t be removed. This can’t be right as eventually we get to work on these cases and often get the hard listings removed through a proper investigation and application of the legislation.

Then there are the companies that say they can get a listing erased in 2 days, or 5 days, or 2 weeks, when the legislation allows a credit provider 30 days to respond to a complaint. We have seen people believe these false promises and sign up for the service only to have their dreams are shattered shortly afterwards when they have already put a deposit on a house (some clients we know have lost their deposit).

One other practice we have seen recently concerns credit repair agents having judgments marked as “discontinued” rather than having them erased from the credit file. It is important to ask the credit repair company if the judgment will be erased as part of the credit repair process, because marking it as “discontinued” is not the same, and a discontinued judgment listing is a red flag to lenders.

My advice

Ask your intended credit repair company these questions:

  1. Do I have to make the complaints to companies who listed me myself?
  2. Are you able to make complaints to all the Ombudsman services as my agent?
  3. When accessing my credit file, will you leave an inquiry listing on my credit file?
  4. When will my listings be removed? (if they set a date this is suspicious)
  5. What are my options with these bad listings on my credit file (if they encourage you into a Part 9 or a high interest loan this is suspicious)
  6. How successful are you with the removal of banking and finance defaults? (these are the hardest listings to erase)
  7. What will it say on my credit file after you work on my judgment listing (if they say it will be marked as “discontinued”, this is a problem)