For those who have court judgements or defaults on their credit file but need to obtain finance, one option is to engage a credit repair agency to try and get them removed. But is getting a default or court judgement erased from your file actually possible? How do credit repair companies work? How do you know which ones to trust?
At Rapid Finance, we specialise in matching customers with the right solutions for their situation - whether you have an unpaid default, bad credit or just need help assessing your options.
So, what is a credit repair company?
Your credit score is based on a number of factors and is calculated using the information in your credit report. However, sometimes that information is inaccurate due to administrative errors or even fraud.
A credit repair company, often called a credit repair agency, is a business that offers to help you fix up your credit report by correcting errors on your file, for a fee. Reliable credit repair agencies could help you remove inaccurate information from your credit report without the hassle of having to tackle it yourself.
If you aren’t able to repair your credit report, it doesn’t necessarily mean you won’t be able to get credit at all. In fact, there are many cases where even those with bad credit could successfully obtain a loan.
If you have bad credit and need help securing finance, Rapid Finance might be able to help. Just give us a call on 1300 467 274 today.
How can a credit repair company remove defaults/judgements?
Until fairly recently it was unheard of for defaults and court judgements to be removed from a credit report, but the industry has evolved since then. In the past, if a debt was owed but unpaid and the correct default process was undertaken, a default couldn’t generally be removed from a credit report. However, with the birth of credit repair companies, that has changed.
Nowadays, if a default is on your credit report but hasn’t gone through the correct process, the credit reporting body will investigate it. If it is found to be on your file incorrectly, the default can be removed.
TIP: Defaults are generally removed from your credit report after five years, so if it’s coming up to that time, it could be simpler and easier to just wait for it to be removed automatically.
Instances of incorrect credit defaults on a credit report can include:
If you had an already-agreed repayment plan in place before the default was listed.
If you didn’t receive any notice from the creditor about their intention to list the default. Credit providers must send you two notices before listing a default.
Did you know? Most credit providers do not have systems and processes in place if they were questioned on a default? So, in some cases, the credit provider does not respond and then the credit reporting body can remove the default.
A new approach
There is also a whole new approach now taken by some credit repair agencies. Many have developed relationships with some of the larger credit providers (and, in particular, debt collection agencies). Quite often, a debt is sold to a debt collector and they lodge the default. Credit repair companies have started negotiating with the companies that have lodged defaults and, often, they can negotiate to have the default removed and the customer pays off the debt. Other times, if the company has written off the debt, they will just remove it.
Sometimes, it's just too much hard work defending the default process and the credit provider or collection company will agree to just have the default removed. It does depend on your individual circumstances though, so it’s a good idea to chat to a finance specialist to talk through your options.
Should I use a credit repair agency? If so, which?
While there are a number of credit repair agencies that charge customers thousands of dollars to have defaults removed and never achieve the removal, good credit repair companies will know off the top of their heads which defaults and judgements can or can’t be removed.
The industry has recently become regulated by ASIC (Australian Securities and Investment Commission) but there is no regulation about what prices credit repair agencies can charge. Some credit repair companies, like the one Rapid Finance has a relationship with, will let you pay off their fee over time. As an example, they charge approximately $1,100 for the first 5 defaults/judgements removed.
If you would like to be referred to our preferred credit repair agency, let us know and we will make the arrangement for them to call you.
Can I still get credit if I have an unpaid default or a court judgement?
Often, traditional lenders like banks will refuse to give you credit if you have a court judgement / defaults on your file. But you may still have options!
At Rapid Finance, we have over twenty years of experience matching customers with the right lenders for their situation - whether you have an unpaid default, bad credit or just need a hand assessing your options. We can generally assist you if you have a combined judgement / defaults up to the amount of $5,000 or less. (or if you have been paying off the judgement / defaults for more than three months). If you can show that you are doing something about the unpaid balance, there is a high chance that we could help you, but, just like unpaid defaults, it depends on your circumstances overall. The only exception is car and home loan defaults – in this case, we can only assist if these loan defaults have been paid in full.