The key industry body for finance brokers, the Finance Broker’s Association of Australia (FBAA) has accepted the partnership of a leading advocate for accuracy in credit reporting with the aim of educating finance professionals and in turn consumers on issues around credit reporting accuracy and the benefits for loan qualification.
The FBAA’s National President, Peter White recognises a need within the finance industry for broker members to access help for clients who are blacklisted from credit due to the black marks on their credit file which shouldn’t be there.
“This partnership could provide an opportunity for our members to deal with a long term industry player to help ensure those consumers who should qualify for a loan, are given a loan. We hope to see better outcomes for consumers such as less borrowers excluded from mainstream credit, and to reduce the interest rates for those who may otherwise not need to go into non-conforming loans,” Mr White says.
The FBAA has accepted new National Premium Corporate Partner, MyCRA Credit Rating Repairs for this task, headed by former award winning broker Graham Doessel.
MyCRA Credit Rating Repairs is focused on providing a commitment of both service and education to the brokering and finance communities.
Mr Doessel, who is also one of the driving forces and key member of credit rating repair industry body, the Credit Repair Industry Association of Australasia (CRIAA), and has been a frequent media spokesperson on credit reporting issues as they affect consumer and business credit files.
“With credit checks still so vital for obtaining home, business and car loans, the partnership is an avenue for finance professionals to openly discuss and endorse credit rating repair – ensuring their clients are given the best chance at having their credit file accurately reflect their ability to service a loan,” Mr Doessel says.
His company MyCRA Credit Rating Repairs checks for errors and inconsistencies on consumer and business credit reports, particularly when those inaccuracies impact on the person’s ability to obtain credit, such as a home loan.
Currently most credit reports hold negative data for a period of 5 to 7 years, depending on the listing type. Most negative data including too many credit enquiries can stop people from getting a loan. But Mr Doessel says in the past many brokers have found their hands are tied once the credit check shows negative listings.
“Often times it’s not until the broker has done a significant amount of work with the client that the credit check shows up with defaults, clear-outs or court listings, negating the broker’s hard work and denying the client credit.
“Many brokers in the past have had to send their clients packing because they knew it was going to be so difficult for them to remove that negative data – even if the listing was a mistake, and despite the client being otherwise entirely suitable to service the loan,” he says.
The FBAA’s Peter White estimates the volume of consumers their members can’t help because of negative credit file listings – valid or otherwise – warrants the inclusion of credit rating repair in the options brokers present to clients.
“Telcos and other creditors can be quick to put blemishes on credit files – it’s not always accurate. There is possibly billions of dollars in lending that can’t be done that could be done,” he says.
MyCRA acts on behalf of the credit file holder in circumstances of credit file error, to help apply the letter of the law to the credit file holder’s own circumstances, drafting a request to the creditor for removal of inconsistent data and negotiating with creditors and credit reporting agencies for a successful accurate outcome.
“There is a strong legislative framework for listing negative items on credit files, but when it comes to creditors complying with that legislation, there are many instances when this doesn’t occur correctly,” he explains.
Approximately 83% 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.
The volume of credit file errors across the board in Australia is uncertain.
Veda Advantage holds in excess of 16,500,000 credit file reports and a spokesperson recently estimated 1% of the 250,000 credit reports they give out at consumers request as a credit reporting agency to Australians every year contain a material error on the credit file.[i]
But a survey performed by the Australian Consumer Association (now Choice) in 2004 revealed that 34% of the credit files surveyed in their small scale study contained errors or inconsistencies. [ii]
“It’s up to the credit file holder to ensure the accuracy of their own credit file – and this is just not happening on the scale it should be in this country. Then if the credit file holder does find inaccuracies they want to address, dealing with creditors can be a minefield – the classic case of the big guy against the little guy in most cases, and Goliath often prevails – not ending well for the credit file holder,” Mr Doessel says.
Listings are not removed by creditors unless the credit file holder can provide adequate reason based on legislation, and lots of evidence as to why the listing should not be there.
“Credit rating repair requires knowledge of the legislation, lots of evidence, tenacity and relationship development with creditors. Many cases also need to be escalated to external Governmental Agencies, and that is yet another skill set that many people don’t have, let alone the time to engage in or learn,” he says.
Mr Doessel says the partnership will pave the way for better accuracy in credit reporting and more Aussie families realising the dream of home ownership.
“The strength of the FBAA endorsement should help to bring these issues to the forefront for the benefit of all credit file holders in Australia,” he says.