Having a bad credit rating is like having cancer, and I know because I’ve had both. They both threaten to destroy everything you hold dear, and it feels like both of them are out of your control. But that’s not true, and in the next few paragraphs, I’m going to explain exactly what it is that bad credit will do to you if you don’t fix it, and then how you can to fix it.
What is bad credit, and how do you get it?
Bad credit is anything on your credit file that will reduce your credit score. You might have:
- a telco default because you paid your mobile phone bill late; or
- an energy default because they didn’t update your details to your new address; or
- chosen to pay your staff wages as a priority over your credit card bill; or
- simply applied for too much credit, and the applications themselves are ruining your credit rating.
You’re in small business, cash flow issues happen almost every day, and while you may not be in the circus, if you’re like most small businesses, you’re very good at juggling.
If you’ve ever had a black mark on your credit file, you’ll know that it can stop you doing almost everything financially.
- Declined a newspaper account
- a mobile phone upgrade
- right up to funding for your next massive business expansion
all hopes destroyed because of bad credit.
So what can you do?
Every bad credit default listing (or Judgement) has the possibility of being challenged and removed. In fact, we remove more than 9 in 10 bad credit listings (audited figures), and you can do it yourself for free.
Quite simply, challenge every listing as most defaults are incorrect. Even if you genuinely owed the money, the law requires the creditor take certain steps before listing the default.
Miss a step, lose the default!
How to challenge the default listing
In short, the legislation requires that your creditor give you adequate opportunity to pay your bills before they’re allowed to default you. Part of this process is that they need to send you several notices, and the default needs to be 60 days or more in arrears before you’re default listed.
There are very strict provisions that control almost every conceivable aspect of what the creditor must do before defaulting you. And I can tell you that the only reason we get these defaults removed so often is:
1.) we know the rules (approx. 8,000 pages of legislation); and
2.) the creditors don’t.
In closing, if your bad credit rating is hurting your business, use the same strategy we do and stand up for your rights. It’s not easy, but it is possible to get your default removed. Good luck!
To check your credit report for free go to http://www.freecreditrating.com.au/
Written by Graham Dossel
Director of MyCRA Lawyers