So here is a list of questions to ask a prospective credit repair company, so you get the right one fighting your case.
- Is it left to me to make the complaints to the companies who listed me?
There are credit repair companies that do not tell you that they only intend to send you a pack of template letters in order for you to do your own credit repair yourself. These companies charge around $1200 and tell you that will erase all the bad listings on your credit file, so it seems super cheap. They then email you a booklet, with tips and templates. There are a lot of upset consumers over this ‘service’ because consumers are led to believe they are buying full service credit repair, and when they find they must do all the work, and they are unsuccessful getting the listings erased, they get upset. The reason template letters are largely unsuccessful in clearing your credit file is because the person who listed you has seen these letters before and don’t respond well to them. Using these letters indicates that your case has not been tailored to your particular circumstances, and uses outdated or irrelevant legislation. It’s very important to ask this question.
- Are you able to make complaints to all the Ombudsman services as my agent?
There are quite a few credit repair companies than have been banned by the Ombudsman services because they made many irrelevant or poor complaints that had no chance of success and this was wasting the Ombudsman’s time. They were also not responding to the Ombudsman’s requests for further information, which is indicative of them not really caring about your case. If a company has been banned, it’s a big red flag to find someone else to do your work.
- When accessing my credit file, will you leave an enquiry listing on my credit file?
Some credit repair companies are also high risk lenders, who write high interest unsecured loans. They may say they will get a copy of your credit file for you, and in doing so they place an enquiry listing on your credit file. If a high risk lender puts an enquiry listing on your credit file your credit score will drop, making it harder to access low interest finance. When a bank sees that you have high risk lenders’ names on your credit file they will assume you cannot get loans from main stream lenders because you do not have the capacity to pay, and/or your credit file is poor. So, it’s vital to ask this question.
- When will my listings be removed? (if they give you an exact date this is suspicious)
If a credit repair company guarantees that they can have your listing erased in two days, or five days, or two weeks, or on any particular date, this is cause for concern. The legislation allows a credit provider 30 days to respond to a complaint by a credit repair company. Sometimes they do respond far more quickly than that but that isn’t guaranteed. So be careful if a credit repair offers you an exact time for removal as part of their sales process.
- Are there any other options to fix bad listings and debts on my credit file? (if they encourage you into a Part 9 or a high interest loan this is suspicious)
Some credit repair companies do poor investigations of the bad listings on your credit file, and then encourage you into a Part 9 debt agreement (effectively, bankruptcy), or high interest loan instead, when this is not in your best interest. A Part 9 stays on the National Personal Insolvency Index for life. This is credit repair click bait at its worst. Be very concerned if the credit repair company you are considering if also writing high interest loans, or debt agreements, there is a major conflict offering all three services, and they will not act in your best interest, but in theirs.
- How successful are you with the removal of banking and finance defaults? (these are the hardest listings to erase)
Some credit repair companies will offer you a ‘no win, no fee’ service but you truly do get what you pay for. These company’s cherry pick the easy listings to remove and leave the difficult ones (those that affect your credit score most dramatically) on your credit file. This means you still can’t get a low-interest loan, even though you have paid a lot of money on the basis of an easy removal. Look for companies who take a holistic view of your credit file and circumstances.
- 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)
There is a procedure that has to be followed when erasing a judgment listing from a credit file. Some credit repair companies use an easier solution which only marks the judgment as “discontinued” rather than erasing it from your file. If you have a judgment marked “discontinued” on your credit file you will not be approved for a low interest finance.
My advice: when considering which credit repair company to choose, ask these questions up front and choose a credit repair company that is going to fight for you all the way through the process, and is not hopelessly conflicted in the advice they give you.