A default on your credit file, commonly known as a ‘Black Mark’ can have serious implications in regard to obtaining finance. More often than not, the only way to secure finance with default information on your credit file is through a high-interest lender. High interest lenders are known to charge up to double the principal amount in interest alone. Default information can be listed on your personal credit file by the credit provider if the following criteria are met:
i. Your account has fallen 60 days overdue; and
ii. the provider has issued you with an overdue account notice; and
iii. the provider has issued you with an intention to default notice; and
iv. the debt is not statute barred; and
v. the amount of the overdue payment is equal to or more than $150.
Irrespective of the overdue amount listed as a default on your credit file, future credit providers will see you as a credit risk and will either decline your application for finance or charge exorbitant interest rates. Defaults remain on your credit file for 5 years and unfortunately paying the debt does not remove the default information – it simply marks it as paid, and you are still considered to have bad credit.
For those looking to obtain finance such as a house or even a phone plan within the next 5 years, the only way to avoid the high possibility of being declined or going through a high interest lender is to fix your credit file. Fortunately, there is a way to overcome this and have the default information removed from your credit file if the default is disputable. In Australia, Credit Providers must follow privacy laws and/or credit reporting codes of conduct prior to listing default information on a credit file. If the Credit Provider has breached one item in the Privacy Act, then the default information must be destroyed.
If there has been a breach of the Privacy Act has occurred, you can dispute the default information on your credit file and request that the default information is removed. Legislation allows Credit Reporting Bodies such as Equifax, Dun & Bradstreet and Experian up to 30 days to respond to disputes. Repairing your credit file can be done yourself but we do not recommend it unless you are familiar with the hundreds of pages of the Privacy Act. Hiring a credit repair company can increase your chances of success, save you time and help you gain back your financial freedom. If you know or believe that you have a default on your credit file, give us a call or request a call back for a free assessment and credit file audit with the help of one of our friendly consultants. The team at Credit Wipe Australia, look forward to helping you move forward, overcome your challenges and achieve your goals.