With the cost-of-living crisis escalating, it’s no wonder that the demand for credit repair in Australia is also on the rise. However, as a nation, Australia’s financial literacy is declining, putting vulnerable people across all generations at risk of credit repair scams and more. However, we hope this post makes a difference. We will ensure you understand what credit repair is, including why you might need it and choosing the right service, and how to go about building up your credit score.
What Is Credit Repair? Your Simple Definition
In essence, credit repair is the name for improving a person's credit score and overall credit history. This often involves disputing errors or inaccuracies on a credit report, negotiating with creditors to remove negative information, and taking steps to build a positive credit history.
How Long Does It Take to Rebuild Your Credit?
The time it takes to rebuild your credit can vary depending on several factors, such as the current state of your credit, the steps you take to improve your credit and your overall financial situation. As your credit score is based on your credit history, it can take some time to see your more positive credit behaviours take effect. For instance, avoiding late or missed payments may not change things on your report for a few months, or even a year. Alternatively, if you’re just disputing errors, you might see your score change in as little as a few weeks. Ultimately, credit repair does work, it just can take some time.
5 Ways Credit Repair Can Change Things for You
While it may take some time to see your credit repair in action, there’s plenty of reasons to stick with it.
- Better interest rates: A better credit score can lead to more favourable interest rates on loans and credit cards, which can result in lower monthly payments and less money paid in interest over time.
- Increased borrowing power: A good credit score can also make it easier to access loans and credit, as well as increase your borrowing power. If you need a loan for a home, car, or another major expense, this can be especially helpful.
- Lower insurance premiums: Some insurance companies use your credit score as a factor in determining your insurance premiums. Improving your credit score can result in lower insurance premiums, saving you money again!
- Increased financial flexibility: Good credit can also give you more financial flexibility, as you’ll find it easier to access credit and loans when you need them.
- Improved peace of mind: Finally, improving your credit can help reduce financial stress and give you peace of mind. You can feel more confident about your financial future and your ability to make important purchases and investments.
5 Credit Repair Tips That You Can Put Into Action Today
There’s no time like the present, especially when it comes to your future. So, here are 5 things you can start working on today when it comes to your credit.
1. Check Your Credit Report Regularly
Grab a copy of your credit report — it’s free! — and review it for errors or inaccuracies. Anything that doesn’t seem right may be an error on the creditor’s behalf or could indicate identity fraud. Make it a habit to regularly review your credit report and score to ensure that you can catch any problems before they spiral out of control.
2. Pay Your Bills on Time
Late or missed payments can have a major impact on your credit score, so it's important to make payments on time. At the same time, paying your bills on time or early, also impacts your credit score, just in a positive way. If you're having trouble keeping up with payments, consider setting up direct debits or speaking with a credit counsellor to develop a budget that works for you and your situation.
3. Reduce Your Existing Debt
High levels of debt can drag down your credit score, so it's important to work on reducing debt. This may involve paying down credit card balances, consolidating debt, or negotiating with creditors to lower interest rates, eliminate late fees or remove the debt for a lump sum payment. Having less debt hanging over your head will also help you feel more confident about your financial situation.
4. Limit New Credit Applications
Every time you apply for credit, it generates a hard inquiry on your credit report. These can temporarily lower your credit score. So, limit new credit applications to what is necessary and try to space them out as much as possible. Otherwise, it can look like you’re in a bit of financial trouble.
5. Use Credit Wisely & Become a Smart Borrower
Where possible, avoid maxing out credit cards or using too much of your available credit. Like applying for new lines of credit, this can negatively impact your score by implying you are in a hard financial situation. Instead, try to keep credit card balances low and use credit only when necessary. Coming up with a detailed budget and choosing credit cards that best suit your needs will go a long way to meeting this goal.
Choosing Your Credit Repair Agency for Easier Credit Repair
While you can manage your own credit repair, many people find it easier to go through a credit repair business. These services exist to handle the ins and outs of credit repair, which you may be too busy to manage or not feel confident doing so.
5 Reasons to Trust a Professional Credit Repair Service
When you work with a credit repair service, you’ll find that you benefit from:
1. Expert Knowledge & Profession Experience
Credit repair agencies have experts who are knowledgeable about credit laws and regulations, as well as the credit reporting process in general. As a result, they can help you understand your credit report and identify areas that need improvement, as well as anything that may be inaccurate.
2. Practised Dispute Resolution Services
If you find errors on your credit report, a credit repair company can help you dispute them with your creditors. They can also negotiate with creditors to remove negative information or lower interest rates on loans. While you can do these things yourself, you may need to regularly chase up your case with your creditors and argue on your behalf. This can take a lot of time and effort, when your attention may be needed elsewhere. Whereas this is a credit repair service’s job!
3. Great Savings on Time & Effort
As noted above, repairing your credit can be a time-consuming process, particularly when going back and forth between creditors. However, with a trusted credit repair business, they can take care of the process for you, saving you the trouble.
4. A Personalised Plan for Success
As part of their service, your credit repair agency may create a custom plan to best address your credit issues, taking into account your report and financial situation. This can help you prioritise what is most urgent and what will go on to keep improving or maintaining your credit score.
5. Ongoing Support As You Navigate This Process
Whether you have questions or just want an update on how things are going, the right credit repair service will keep you in the loop and let you know what else you can do.
So, How Do You Pick the Perfect Credit Repair Service?
With a quick Google search, you’ll find that there are many credit repair services offering their services to you. But how do you separate the wheat from the chaff and find the right service for you?
For starters, there’s a few things you want to see from your chosen credit repair business.
- Transparent pricing, including all fees and services with a clear, written contract that outlines what you can expect. When it comes to credit repair in Australia, the cost can range from a few hundred dollars to several thousand dollars, depending on the complexity of your needs.
- Positive reviews from past clients, including testimonials or case studies, that show they provide a valuable service.
- Staff who are knowledgeable about credit laws and regulations and have experience providing quality credit repair services.
- Good communication, include regular updates and answering questions, so you won’t feel left out of the loop or worry about your investment.
Conversely, there’s plenty to look out for as, unfortunately, there are scam and unethical companies around.
- Upfront fees: As with any service, paying before receiving a service can put you at risk of being scammed. This is why it’s important to choose a service who is transparent about their pricing.
- Guarantees of specific results: While credit repair companies can help you get better results because of their knowledge and experience, remember to be sceptical of anything that sounds too good to be true.
- No online or physical presence: You want to see a track record from your credit repair service. So, if they’re hard to find, including any reviews, it’s best to give them a miss.
- Pressure to sign up fast: A good credit repair company will take the time to get to know your financial situation first to assess if they can help. However, dodgy operations will want to get you in quickly so you have less time to consider if they are a good fit or not.
- Requests for personal information: While they may need some personal information from you to better understand your financial situation and credit score, your credit repair service should be able to clearly explain why the information is needed. If their reasoning is vague or doesn’t make sense, walk away.
Start Living With Less Financial Stress: Begin Your Credit Repair Journey Today
Done right, credit repair — including working with a credit repair agency — has the potential to reduce your financial stress and open up greater opportunities for you, whether it’s purchasing your first home to start a family or buying that dream car. However, you need to be committed to put in the time and effort to not only repair your credit but also keep it looking great. That’s why many Australians are finding that working with a credit repair business is the way forward. When you know what to look for — and what to avoid — you can trust that your credit report has been cleared of inaccuracies and that your debt has been negotiated as competently as possible. You will also have a reliable professional to talk to about any other credit concerns you may have.
If you want to repair and restore your credit, we recommend Credit Repair Solicitors. As experienced legal professionals, they understand what is possible when it comes to fixing credit. They also have the skills and previous experience to get you the best results possible. So, if you’re ready to make a change for good, contact them today for your free, no-obligation consultation.