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 to save money by doing
your own credit repair.
What credit repair companies can
and can't do
Don't pay a credit repair company to get your credit report -
you can get it for free yourself.
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
If you know the information on your credit report is correct but
the company tells you they can remove or change it for you, walk
away. Details can only be changed or removed if they are
proven to be wrong.
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
fees, and the terms of their contract.
If they cannot clearly explain what services they are going to
provide, this could be a warning sign, and you might be better off
trying to repair your credit yourself.
Fees charged by credit repair
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
Read ASIC's report on debt companies which
reveals a high pressure sales environment and hidden 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
Charging you for free services
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
You could save yourself a lot of time and money by contacting an
Ombudsman directly, rather than going through an agent.
Read more about this in the NSW Energy & Water Ombudsman's
use and experience of 'credit fix' agents.
How to sort out your own credit
A poor credit report could affect any loans or credit you apply
for in the future, so it is important to make sure the information
If there is an error on your credit report, you have the right
to get this fixed. There is no charge for this, but your credit
report can only be changed if a listing is inaccurate or out of
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: 24 Oct 2016