Credit Repair, what everybody ought to know

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Here at Jacaranda Finance we are all about being transparent. We offer transparent, up-to-date information when it comes to unsecured short-term personal loans. This is why we thought we would give our customers some insight into a new area in the finance business – credit repair.

These days most people are trying establish or pay off a loan. Some need that instant cash loan to head overseas or a quick unsecured loan to make ends meet between paydays. No matter what your loan is for, sometimes factors out of your control influence your ability to make payments. Before you know it there is a default listing against your name.  This is why many people are turning to instant unsecured loans to get back on track, if you have bad credit or become unemployed, quick loans can be a lifesaver.

Thankfully companies like Jacaranda Finance are offering short-term unsecured loans to help out in the times you need cash fast.

According to Australian law once you have paid of the debt, the lender is obliged to update the listing on your credit file as soon as practicable.  What many people fail to realize is a default payment will remain on your credit file for five years, a mark on your credit history.

What if further down the track you are looking to take out a more substantial personal loan or home loan? Defaults or negative listings can affect many areas of your life and you may not even know it yet. You might find it harder to rent an apartment or you could end up paying more for car insurance.  It’s consequences like these that have lead to an entire new business model – credit repair.

You can search for credit repair on Google and thousand of sites come up promising to wipe your credit history clean. You as borrowers just want the default or defaults gone, so you can have a clean slate and get a new loan for that car you’ve been eyeing off.  However, before you rush to a credit repair company and hand over your cash there are a few things you should take into account.

What does a credit repair company do?

These companies call themselves anything from ‘credit repair’, ‘credit fix’ or ‘debt solution specialists’. Most will make claims that they can improve your credit report and remove default listings. What you need to know is that in most cases information in you credit history, including default listings cannot be removed unless they are proven to be wrong.  Also several credit reporting agencies can look into getting defaults removed for free, whereas ‘credit repair’ companies tend to charge large fees.

For a fee often upward of $900 a credit repair company will primarily contact your lender and offer a generic excuse that relates to your personal situation (loss of income, death in the family, breakdown of relationship etc.) in order to provide justification for the default to be removed. They then in most cases will go on to threaten to contact the Credit Ombudsmen Service if the lender does not comply. Which will generally lead to the credit provider backing down to avoid extra costs and wasting more time.

If it does come to contacting the Credit Ombudsmen Service in Australia it is free to make a complaint about a default or negative listing.

If you break it down in most cases you’re paying for a phone call, some thinly veiled threats and a free complaint service, which you as a customer already have access too.

 

What should you do in order to get default listings removed?

You can get a free copy of your credit report from Dun & Bradstreet or Veda. If you decide anything on the report is inaccurate you can take action yourself.

Instead of letting the defaults slide and dealing with them later why not contact your lender and let them know the situation.  Many lenders will sympathize with borrowers and if it is within their power, they will try and help the consumer, especially if they could get back the loaned money.

If for some reason your lender is unable to assist you, it is within a borrowers rights to contact the Credit Ombudsmen Service directly and it is free of charge, you simply fill out a form and go from there.

If you need more convincing premier Australian review site choice.com.au listed Credit Repair Australia in its 2013 ‘shonky’ awards. Choice highlighted the misgivings of an operation that promises to wipe your credit history clean for what is generally a substantial fee.

“Credit Repair Australia has been known to overstate its ability to improve a credit report, providing false hope.” (Choice.com.au)

As the borrower you have to decide which option is best for you but it is important to know the facts before you start spending.

To read more about credit repair service visit the Credit Ombudsmen Service.

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How customers rate Jacaranda

Credit Repair, what everybody ought to know Overall rating: 4.8 out of 5 based on 60 reviews.

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Fast & Safe Loans

Small Personal Loan

Loan Amount

Minimum
$300


Maximum
$2,000

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Terms

Minimum
12 Months


Maximum
12 Months

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Costs

Up to 20% Establishment Fee
+ monthly fee up to 4%

Jacaranda Finance does not charge an annual interest rate on SACC loans. These small amount loans incur 'fees' instead of interest. The maximum comparison rate on our loans between $300 and $2000 is 199.43%.

WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate
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Examples

Loan Amount of $1,000 over 6 months repayable weekly (25 weekly repayments). $1,000 (Principal Amount) + $200 (20% Establishment Fee) + $240 (fees based on 4% per month over 25 weeks) = $1,440 total repayable in 25 weekly installments of $57.60.

Loan Amount of $1,000 over 12 months repayable weekly (50 weekly repayments). $1,000 (Principal Amount) + $200 (20% Establishment Fee) + $480 (fees based on 4% per month over 50 weeks) = $1,680 total repayable in 50 weekly installments of $33.60.

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Medium Personal Loan

Loan Amount

Minimum
$2,100


Maximum
$4,600

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Terms

Minimum
13 Months


Maximum
24 Months

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Costs

Annual Percentage Rate (APR) starts at 20.56%
Comparison Rate is 20.56% per annum.

This comparison rate is based on a medium amount credit contract of $2,500 repaid over 2 years with a $400 establishment fee and APR of 20.56%.

WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate
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Examples

Loan Amount of $3,000 over 18 months repayable weekly (78 weekly repayments). $3,000 (Principle Amount) + $400 (Establishment Fee) + $555.83 (reducing interest*) = $3955.83 total repayable over 18 months with weekly installments of $50.71.

Loan Amount of $4,500 over 24 months repayable weekly (104 weekly repayments). $4,500 (Principle Amount) + $400 (Establishment Fee) + $1081.85 (reducing interest*) = $5981.85 total repayable over 24 months with weekly installments of $57.51

* Reducing interest means that the 20.56% APR is applied to the outstanding balance on a loan. When a loan repayment is made, the loans outstanding balance goes down and the APR is applied to that lower balance. Therefore, the interest component of the loan will constantly reduce (as long as repayments are being made!) - thus it is called reducing interest.
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Large Personal Loan

Loan Amount

Minimum
$5,000


Maximum
$10,000

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Terms

Minimum
13 Months


Maximum
36 Months

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Costs

Annual Percentage Rate (APR) is 12%
Comparison rate is 19.88% per annum.

WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate
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Examples

Loan Amount of $5,000 over 18 months repayable weekly (78 weekly repayments). $5,000 (Principle Amount) + $1831.16 (Interest) = $6831.16 total repayable over 18 months with weekly installments of $87.57.

Loan Amount of $10,000 over 24 months repayable weekly (104 weekly repayments). $10,000 (Principle Amount) + $5041.72 (Interest) = $15041.72 total repayable over 24 months with weekly installments of $144.63.

* Reducing interest means that the 19.88% APR is applied to the outstanding balance on a loan. When a loan repayment is made, the loans outstanding balance goes down and the APR is applied to that lower balance. Therefore, the interest component of the loan will constantly reduce (as long as repayments are being made!) - thus it is called reducing interest.
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