Credit repair: Don’t pay to fix your credit report — do it yourself for free

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If you have a poor credit score or an error in your credit report, it may affect loans or credit you apply for. You have a right to get errors fixed for free, and you can arrange this yourself.

Beware of paying credit repair companies that claim they can ‘clean’ your credit report by having information removed. This may not be true. Information that is correct, even if you don’t like it, can’t be removed.

What you can get fixed (for free)

Here are some of the typical errors in credit reports. You can get these fixed for free.

ERRORS BY THE CREDIT REPORTING AGENCY

The credit reporting agency may have reported your information wrongly. For example:

  • your name, date of birth or address needs updating
  • a debt is listed twice
  • the amount of a debt is wrong

To fix this kind of error, contact the credit reporting agency. They may be able to fix it straight away or help you get it changed.

ERRORS BY THE CREDIT PROVIDER

A credit provider may have reported information wrongly. For example, they:

  • incorrectly listed that a payment of $150 or more was overdue by 60 days or more
  • did not notify you about an unpaid debt
  • listed a default (an overdue debt) while you were in dispute about it
  • didn’t show that they had agreed to put a payment plan in place or change the contract terms
  • created an account by mistake or as a result of identity theft

To fix this kind of error:

  • Contact the credit provider and ask them to get the incorrect listing removed.
  • If the credit provider agrees it’s wrong, they’ll ask the credit reporting agency to remove it from your credit report.

If you can’t reach an agreement, contact the Australian Financial Complaints Authority (AFCA) to make a complaint and get free, independent dispute resolution.

If you’re struggling to get something fixed, you can contact a free financial counsellor for help.

What you can’t change or remove

You can’t change or remove any information on your credit report that is correct — even if it’s negative information.

For example:

  • All payments you’ve made during the last two years — on credit cards, loans or bills, whether you paid on time or not.
  • Payments of $150 or more that are overdue by 60 days or more — these stay on your report for five years, even after you’ve paid them off.
  • All applications for credit cards, store cards, home loans, personal loans and business loans — these stay on your report for five years.

Important Tip: Avoid credit repair companies that claim they can clean up this sort of thing or fix your debt. They may not be able to do what they say. They may also charge you high fees for things you can do by yourself for free.

Paying a credit repair company is unlikely to improve your credit score.

How to improve your credit score

If your credit score is low, there are steps you can take to help improve it. You can:

  • lower your credit card limit
  • limit how many applications you make for credit
  • pay your rent or mortgage on time
  • pay your utility bills on time
  • pay your credit card on time each month — either pay in full or pay more than the minimum repayment

Smart Tip: As you do these things, your credit score will start to improve. So you’ll be more likely to be approved next time you apply for a loan or credit.

If you’re struggling to pay bills and are getting into more debt, contact us today. We can take you through the options and help you make a plan.

Wealthness Pty Ltd ABN 13 231 248 112  [t/a Better Financial Planning Australia]  is a Corporate Authorised Representative of Infocus Securities Australia Pty Ltd ABN 47 097 797 049 AFSL No. 236523. It is important to be aware that Better Financial Planning Australia is not authorised by Infocus to provide advice relating to credit services or property advice. Infocus is not responsible for any advice outside of the scope of this authorisation and should you wish to act on any of this general information, please first seek professional financial advice.

Wealthness Pty Ltd t/as Better Financial Planning Australia will endeavour to update the website as needed. However, information can change without notice and Wealthness Pty Ltd t/as Better Financial Planning Australia does not guarantee the accuracy of information on the website, including information provided by third parties, at any time.

This information is of a general nature only and neither represents nor is intended to be specific advice on any particular matter. Infocus Securities Australia Pty Ltd strongly suggests that no person should act specifically on the basis of the information contained herein but should seek appropriate professional advice based upon their own personal circumstances. Although we consider the sources for this material reliable, no warranty is given and no liability is accepted for any statement or opinion or for any error or omission.

Wealthness Pty Ltd t/as Better Financial Planning Australia does not give any warranty as to the accuracy, reliability or completeness of information which is contained in this website. Except insofar as any liability under statute cannot be excluded, Wealthness Pty Ltd t/as Better Financial Planning Australia and its employees do not accept any liability for any error or omission on this website or for any resulting loss or damage suffered by the recipient or any other person.

Wealthness Pty Ltd (ACN 613 313 250) [t/a Better Financial Planning Australia] Corporate Authorised Representative of Infocus Securities Australia Pty Ltd ABN 47 097 797 049 AFSL Licence No. 236523.

Source: ASIC MoneySmart

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