Often, people link adverse credit and debt in their minds. In truth, though, a bad credit score doesn’t necessarily mean that a person is in debt, or even that the person has unpaid bills or other outstanding credit infringements. The entire concept of ‘bad credit’ tends to be misunderstood in Australia, including the steps necessary to achieve a credit score fix. Here are some little-known facts about credit that you should know before proceeding in trying to fix your credit situation:
- Several factors can hurt your credit. Credit scores are often used as a metric to assess a person’s financial responsibility or ability to make timely payments on a recurring bill. A bad credit rating, therefore, can be seen by a bank or landlord as proof that a person as a risk for a loan or a rental agreement. However, because so many different factors can negatively impact a person’s credit, it’s common for lenders or other third parties to draw unfair or inaccurate conclusions from a bad credit situation. Bad credit can result from bankruptcy, unpaid or late-paid bills, court summons regarding the settlement of a debt, debt-related court judgments, making multiple credit enquiries in a short period or even from identity theft. Because there are so many things that can affect credit, we often have clients who didn’t even realise they had a credit problem until a loan application returns as declined.
- Bad credit lasts for five to seven years. Whatever the impetus, bad credit typically hits your record when a third party—claiming that they were not paid or not paid on time—reports that incident with the credit reporting bodies in Australia. What most people don’t realise is that, once that information is on your credit file, it stays there for anywhere from five to seven years. Even if you pay off the bills that led to the bad credit, it is not a ‘bad credit fix,’ as said credit remains on your credit file.
- It is still possible to remove bad credit from your file. ‘So how do I fix my credit rating if even paying off the bills that led to the bad credit doesn’t do the trick?’ This question—or variations of it—is something that we hear every day. Fortunately, there are ways to fix a credit report to make sure that the bad credit doesn’t linger for the better part of a decade. Many companies do not follow the proper protocols before defaulting a late payment and reporting someone’s bad credit. As a result, the credit laws in Australia provide space for a credit score fix company such as ours to remove the bad credit in some situations. Keep in mind that we can help only if your creditors did not follow the correct credit laws and procedures when reporting your default to credit reporting bodies. We know what to look for with these breaches in legislation. If we can find such a violation with the reporting of your credit, we can have those adverse credit events removed from your record within ten to thirty days, rather than five years.