Don't get in a fix over credit
It might sound like a good idea to pay someone to help fix your
credit history, but credit repair agencies may not always be able
to do what they claim. Here we explain what you need to be aware of
when dealing with these companies, and show you how you could save
money by doing your own credit repair.
Find out what credit repair
companies can and can't do
It's a good idea to check your credit report every year to make
sure it is correct. A copy of your credit report is free if
you can wait 10 working days. See credit reports for
Be wary of 'credit repair', 'credit fix' or 'debt solution'
companies that claim they can improve your credit report. In most cases,
default listings and other historical information cannot be removed
from your credit report unless they are proven to be
Credit fix or credit repair agents act on your behalf to
challenge incorrect listings on your credit report. These companies
can be useful if you do not have the time to do this yourself, but
make sure you understand what services they are offering, their fee
structure, and the terms of their contract.
Credit repair agencies typically charge very high fees, as much
as $1,000 to fix one listing. Depending on the size of your debts,
signing up for a credit repair service could increase your
financial problems rather than fix them. Large fees can be charged
even if the agent is unable to remove the listing. Remember, they
will not be able to remove or change an item on your credit report
if the details of that listing are correct.
Read ASIC's report on debt companies which
reveals a high pressure sales environment and opaque costs.
The Financial Rights Legal Centre explains the
pitfalls of debt management firms in their video 'Debt
Dating'. View it at their website yourfinancialrights.org
Go to the Ombudsman for free
A credit repair agency may ask an Ombudsman's external dispute
resolution (EDR) service for assistance in resolving your case. The
agent could then charge you a fee, even though Ombudsman services
are free. You could save yourself a lot of time and money by
contacting an Ombudsman directly, rather than going through an
For more information about credit repair services, see the
research report by the Energy & Water Ombudsman NSW, Consumers'
use and experience of 'credit fix' agents.
Do it yourself credit repair
A poor credit report could affect getting a loan in the future,
so it is important to make sure the information is correct.
If there is an error on your credit report, you have the right
to get this fixed. There is no charge to do this, but
remember that your credit report can only be changed if a listing
is inaccurate or out of date.
See the information in
how to check and correct a wrong listing for details on how to
fix incorrect information on your credit report, and how to contact
an Ombudsman if you need help.
Fixing a wrong credit listing should not
increase your money worries. Understand exactly what a credit
repair agent can do and what it will cost. It may be better to do
Last updated: 12 Sep 2016