The other day I was thinking about why I love doing credit repair. It’s because our work helps one consumer or company at a time get back on a good financial track. There are lots of great stories in my mind about lives improved that keeps me loving this job.
One of my favourite stories is about one of our first clients 9 years ago. He came here as a refugee and did not understand how consumer credit worked in Australia. He got a default on his credit file from a phone company. This was stopping him getting a loan to achieve his dream of opening a restaurant in a NSW country town. Today, he has three restaurants in that same country town because we erased the phone listing from his credit file and he got a loan. Now he employs lots of people from the community.
And there are other reasons why I love this job. They are:
- Credit repair is needed by many Australians
Veda Advantage says there are currently 16.38 million credit active consumers in Australia. This means there are 16.38 million credit files in existence in Australia. Now here is an amazing statistic: on these 16.38 million credit files, there are listed 3.8 million defaults and 477,324 court actions. That’s a lot of ‘black marks’. And there’s more. On commercial (that is, company) credit files in Australia, there are listed 158,025 defaults and 105,000 judgments. The numbers are huge. It is therefore safe to say that at least one in 10 Australians are affected by an adverse listing or black mark on their credit file but the figure is probably closer to one in five.
So what is the consequence of all these black marks on credit files? Well, if you have a black mark on your credit file, this may prevent you from getting finance at all (even for a mobile phone). Or it may mean you have to pay between 2-10 per cent more in interest per year until the black marks drop off your credit file. On an average property value of $400,000, this would mean paying up to $24,000 more in interest per year (based on a 9% high interest loan, instead of a 3% low interest loan) while the black marks remain on your file.
- Credit Providers are thankful for credit repair
Yes, credit providers do have a heart – we speak to that beating heart every day. Each week we receive emails from credit providers that thank us for getting the facts straight in relation to removing adverse listings that were placed in error. Because there is a defined process that credit providers must follow prior to placing a listing on a credit file, they are often thankful when we alert them that one of their processes has failed. They are often keen to rectify this situation as quickly as possible because they understand the consequences of having an adverse listing – high interest rates or not being able to get finance at all … for years.
- Credit repair helps people get low interest finance
This is a big one for me because it is really about the hip pocket.
It does not make a lot of sense to me, but if a consumer or company has a bad credit score they will be offered high-interest finance. This finance comes with a high application fee and a higher possibility that the client will have difficulty servicing the loan. This can lead to a cycle of poverty among consumers and can lead to the downfall of companies, which is not good for the Australian economy.
People usually think they have to wait out the five to seven years that it takes for a black mark to drop off a credit file. One of the largest costs to consumers and companies is the high interest rates they will pay to second-tier lenders if they need finance during this period.
It is far better to have a reputable credit repair company work to remove incorrect black marks. Even the removal of a single black mark can improve your credit score, and your prospects of getting lower interest finance. In our experience over 80% of black marks are placed in error and must be erased. Last week we removed a HSBC credit card listing for a client. It took 16 days to erase. Their credit score jumped from 483 to 970. Anything over 650 is a good score so the result was fantastic. We sent the client before and after credit files so they could see the difference. They are about to apply for a home loan for their first home, That’s why I love credit repair.