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[MoreMore Insights] Credit Repair

Updated: Jun 27, 2022

What is Credit Score?

A credit report is a document that records the history of a person's credit activities and reflects the person's credit status. When you first apply for credit-related services, your personal credit file will be automatically generated.  

A credit score is a score generated by a credit reporting agency based on what is recorded in your credit report. It will give points for good behavior and take points off for bad behavior. Paying utilities on time, paying off loans and credit cards on time, proactively reducing credit card limits, and consolidating debt are good credit behaviors. Failing to pay your bills on time, falling behind on your bills, or applying for multiple credit products in a short period of time can take a toll on your credit score. 

What is Credit Score For?

Your credit score will be used by banks and lending institutions to judge your credit rating, and good personal credit is a prerequisite for the approval of a loan. So credit scores make it easier for you to get all kinds of loans and services, and also increase your ability to borrow more money and lower interest rates. 

But what if the credit score is already low, is there any way to increase the credit score in short period of time? The answer is yes. And this is where credit repair comes in.

What is Credit Repair?

If you have a bad credit history or have filed for bankruptcy, there are ways to fix it on your own or seek the help of an agency to clean up incorrect or negative records on your credit file and take positive credit actions to improve your credit score, known as credit repair. 

What does Credit Repair Generally Include

Generally include:

- Credit file repair 

- Judgment removal 

- Default removal of credit stains 

- Remove negative items from your credit record

- Improve Credit Score  

- Timely update of the process. 

Credit Repair Process

Different institutions will charge different fees, and there are fees for each credit record repair.  The general process is: 

- Preliminary consultation.  This section describes the service content. 

- Check your credit file.  Check to see if you have any errors that can be deleted and corrected to improve your credit score, 

- Decided to repair credit.  Make a list of incorrect records that you want to investigate and remove, and pay for them. 

- Contact creditors. If the credit repair company accepts your application, it will contact creditors to determine which defaults can be removed from your file. If you still owe money, some credit repair agencies may be able to negotiate a payment plan with your creditors. 

- Records are deleted. 

How to Choose Credit Repair Agency

When choosing a repair facility, there are several factors to consider:  

- Permits. Check if the credit repair service has an ABN, which you should be able to find at the bottom of the company's website.  

- Transparency. The complete service process can be shown before payment.  

- Reputation and customer reviews. For organization's reputation in the industry, check online reviews from real customers.  

- Price. Look for the best combination of affordable prices and excellent service.  

How to Do Credit Repair For Free

Sometimes, you might have the right to fix credit errors free of charge.  For example: 

- Errors by credit reporting agencies. Misstate your personal information or how much debt you owe.  All you need to do is to contact the credit report structure and ask that error to be removed.  

- Mistakes from lenders.  For example, failing to notify you of an outstanding debt, accounts created through identity theft, etc. You will need to contact the lender and ask for the error to be removed or lodge a complaint with the Australian Financial Complaints Authority (AFCA).  

Is your mortgage application declined due to low credit score? Contact your mortgage brokers at Moremore Finance to get a free consultati

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