Fixing a mistake in your credit report can be daunting and many Australians may think that there must be a cost involved. But fixing an error should be simple and free, says the Australian Retail Credit Association (ARCA). To address this issue, ARCA has launched a myth-busting fact sheet on credit repair, informing consumers and financial professionals on how to make a correction.
ARCA CEO Damian Paull said while the promise of a quick fix from a credit repair company might sound enticing, it could end up leaving consumers out of pocket.
“There are a growing number of companies offering to ‘fix’, ‘clean’ or ‘repair’ a consumer’s credit report for a fee. But as with all quick fix promises, consumers need to watch out, especially as credit repair companies often charge large fees for managing what consumers can do independently and for free.”
“Credit repair companies may also overstate their ability to fix a credit report and, in some cases, may impose unfair terms which make it difficult to terminate the agreement with the company,” added Mr Paull.
If a consumer finds a listing on their credit report that they think is a mistake, there are laws to protect them.
“Consumers don’t need to pay anyone to ‘repair’ their credit report. Credit repair agencies have no greater capacity to remove information from credit reports than consumers do by going through an established, cost-free procedure,” said Mr Paull.
Australian law requires credit providers and credit reporting bodies to investigate and respond to consumer requests to correct their credit report within 30 days. Where such a request to correct an error may take longer than 30 days, consumers must be advised and agree to any extension of the investigation. If the matter is not addressed in a timely manner or if a consumer is unsatisfied with how their complaint has been addressed, they then have the right to lodge a direct complaint with an external dispute resolution service, such as the Financial Ombudsman Service or the Credit and Investments Ombudsman.
For further information, or a copy of the credit repair fact sheet, consumers can visit ARCA’s CreditSmart website at www.creditsmart.org.au. CreditSmart also provides a fact sheet on credit scores. The website is a resource developed by ARCA in partnership with Members to educate consumers on credit reporting in Australia.
