Credit Repair Australia – Monzi’s Quick And Easy Guide

If you have ever used a credit card or taken out a loan, you will have a credit report detailing your borrowing and repayment history. However, if your credit history is looking less than ideal, your borrowing future may be impacted. Here’s what you need to know about your credit, credit repair Australia and everything in between.

Credit repair Australia: what is a credit score?

Before addressing credit repair Australia and why it is essential to your performance in the financial world, you should be familiar with the concept of a credit score. A credit score is a numerical ranking of your relationship with credit. Every credit withdrawal and credit repayment – or lack thereof – combines to calculate your credit score.

Depending on which credit reporting agency you utilise, your credit score will be between zero and 1,000 or zero and 1,200. Your score will align with a five-level scale; excellent, very good, good, fair, and average. Typically, dependent on the agency, any score under the 500 mark is considered unreliable by many lenders.

If your credit score is unfavourable, lenders may consider you a risky investment for their credit. This does not mean nobody will lend to you. However, it may make you undesirable when seeking larger loans such as home loans or car loans.

What is a credit report?

The other factor that goes hand-in-hand with your credit score is your credit report. Your credit report details all aspects of your financial life, along with your key personal details.

Lenders who access your credit report are privy to your borrowing and repayment history, any applications you’ve made for credit (e.g. cash loans) or credit cards, utility and rent/mortgage missed repayments, and credit card repayments. Your name, birth date, license numbers, address, and any criminal records are also shown on your report.

All of these factors may be examined by your possible lender upon applications made for loans or new cards. They cannot be viewed without your permission. However, it is less likely that you will be granted a loan without your lender examining your credit report. So, it’s best to keep your credit report looking good.

Credit repair Australia – what is it?

So you have an undesirable credit score? What do you do now? Well, you should begin the journey to repairing it, of course. But, what does credit repair Australia mean? Well, in the same way that you’d restore your tarnished physical possessions, you can also show your credit score some love. By creating better financial habits, you can potentially raise your credit score.

This means obtaining and analysing your credit report, understanding your spending limits and meeting your repayment deadlines. Credit scores are not forever and can be rebuilt by paying the right attention to your report.

How do you know if your credit needs repairing?

Generally, a poor credit score is a pretty dead giveaway that you need to begin repairs on your credit profile. The likeliness that you will be approved for a quick cash loan lessens the further down that five-level scale you drop. If you have a score sitting below 500, then it’s time for you to better acquaint yourself with your credit report and kick out bad practices that hinder your successful financial development rather than help it.

Contributions to an unhealthy credit report include:

  • Defaults – unpaid debt or accumulating debts that have remained unpaid for 60 days or more. Patterns of outstanding mortgages, rent, utilities, and phone bills – depending on whether the respective landlords and businesses wish to report it, can also be listed as defaults.
  • Frequent credit applications – especially unapproved applications.

What bills impact my credit score?

Missing the rent due date by a couple of days is not going to ruin your score. Neither is an unpaid phone bill or a delayed utility bill. All these bills concern individual companies, not reporting agencies, meaning they won’t instantly show up on your credit report and crush your sound score. These bills only become defaults when they have gone unpaid for 60 days or more. For example, your landlord can also choose to report you if you have a pattern of not paying rent on time for many months in a row.

Whether your bills end up on your credit report depends on whether you are paying them before the 60-day limit, and if this is a common occurrence.

How do you view your credit report?

You can obtain your credit report through a credit reporting agency. There are multiple credit reporting agencies in Australia, with the leading agencies being Equifax and Experion. You can obtain your credit report for free from these and many other agencies.

To get your report, visit one of the relevant sites and enter your details. Provided all your information is correct, the agency should generate your report within a matter of minutes, and you are free to peruse the report.

Once you’ve had your report generated, the details it is showing must be correct, as errors can be made. Upon verifying that your report is errorless, you should identify your areas for improvement and begin your credit repair Australia.

Common errors found in credit reports – reporting agency

Reporting agency errors that are commonplace within your credit report are often input related. Common agency errors generally revolve around incorrect personal information, whether this is a misspelled name or an incorrect birth date.

If you identify any incorrect information, you should contact the agency and correct this as soon as possible. Other information that requires immediate contact with the agency is any incorrect debt amounts, or debts listed twice. These errors can impact your credit score, so it is best to have them fixed quickly.

Common errors found in credit reports – credit providers

On the other hand, there can be errors in your report put there by your credit provider. These can be more impactful than the mistakes made by the agency. The errors credit providers can list include:

  • Not notifying you about a debt.
  • The creation of an account as a result of identity theft or by mistake.
  • The incorrect claim that one of your payments is overdue.
  • The listing of a debt that you are currently disputing.
  • Not making a note that there have been agreements to change a contract or install a payment plan.

Credit repair Australia: how do I fix errors on my credit report?

To fix errors such as those listed above, you should contact the credit providers and raise the issue. Provided that your credit provider agrees that a mistake has been recorded, they will contact the reporting agency so that the appropriate changes can be made.

If an agreement is not made between yourself and the credit providers, you may have to take your complaint further up the chain of command and contact The Australian Financial Complaints Agency (AFCA). The AFCA assists with settling claims. Once you lodge a complaint with them, they should attempt to help both parties reach an agreement, and hopefully fix the error on your credit report.

The AFCA is a free service; however, it is vital to keep in mind that the AFCA cannot consider all complaints to ensure you fit their criteria before placing a claim.

What remains on your credit report?

There is a handful of information that will remain on your credit report for a designated period. The length of time this information remains viewable is dependent on the data in question. Details that remain viewable include:

Repayment history – two years

It displays whether you have made your repayments on time, Your repayment history will remain for 24 months on your credit file for each credit account.

Credit accounts – two years

This information is significant to lenders. The details of your accounts will stay viewable for the account’s duration until two years after the closure of the account.

Defaults – five years

Defaults remain on your credit report for five years. Any overdue debt has a long shelf-life on your credit report and paying off the debts will not result in it being removed from your report. However, reporting agencies should update the default status accordingly.

Enquiries – five years

The application for credit, or a credit account/card, whether successful or not, will remain visible for five years. The influence of these enquiries on the lender depends on how frequently they were made.

Court judgement – five years

Any decision made by the court requiring you to pay your credit provider what is owed, along with any loan charges, fees, and interest will remain for five years from the date the judgement was made.

Bankruptcies – a minimum of five years

Personal insolvencies such as bankruptcy and debt agreements will stay on your credit report for a minimum of five years. However, this is dependent on its severity.

Serious credit infringements – seven years

A severe credit infringement is declared if you have attempted to, fraudulently obtain credit, or have ceased repayments without getting in contact with your credit provider for at least six months. This infringement will remain listed for seven years. However, if you pay the infringement off, it will be reduced to a default on your credit report.

Credit repair Australia: how can you improve your credit?

You may have realised that you need to help your credit along, or perhaps you just want to be proactive about maintaining a healthy credit score. How can your credit be improved, you ask? Well, in the simplest terms, you should counteract the causations. The best steps for credit improvement are as follows:

Step one: Only apply for new credit accounts when necessary

An excess of accounts can be harmful to your score and report as it will increase your inquiries and allow you the room to spend too much, resulting in debt. The best way to improve your credit is to avoid overspending and the pathways that encourage it initially (e.g. buy now pay later services).

Step two: Ensure you’re paying your bills on time

One of the critical aspects lenders are interested in is your reliability. If you are unable to pay your bills, your lender could view this as you being a possible liability. It is best to ensure that you meet deadlines for the repayment of your cards, rent or mortgage, utilities, and possibly any phone bills.

Step three: Lower credit card limits

Another way to reduce your likelihood of accumulating debt is to lower your card limits as much as possible. If you only have access to a limited amount of credit, you also limit your chances of stacking up debt.

Step four of credit repair Australia: Pay off any debt

The next step is to ensure you do not have any debt. While defaults remain on your report for five years, the status of these defaults is also displayed. Defaults that have been paid look better to your lender than outstanding defaults.

Step five: Dispute inaccuracies on your credit file

View your credit report and ensure it is error-free. If you find an error, contact the respective reporting agency or credit provider to ensure this inaccuracy is corrected as soon as possible.

Step six: Maintain your credit file in the future

Be proactive about your credit. Ensure you take the necessary steps to prevent an issue before it occurs; the best method of credit repair Australia is maintenance.

Where can you get help with credit repair Australia?

If you require further assistance with your credit repair, you can employ the aid of a credit repair agency Australia. A reliable agency should ideally provide you with the help you need to re-establish a good credit score.

Credit repair agencies act on your behalf and generally specialise in disputing information on your credit report for you. However, you should maintain a level of cautiousness when investing in one of these agencies. There can be substantial upfront costs involved, and they may not even be able to have your credit report information edited.

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Credit repair Australia: How do credit repair agencies work?

Credit file repair Australia has a process when it comes to rectifying your credit. The primary role of these agencies is to investigate your harmful listings and work to solve them and remove them from your credit file.

Bad credit repair companies Australia should request a copy of your credit report, and thoroughly investigate the details listed, combing through to identify incorrect information. Once they find an area that requires improvement, they should liaise with the respective reporting agency or credit provider on your behalf. Ideally, they will have any inconsistencies rectified – omitting your need to chase down corrections yourself.

Advantages and disadvantages of credit repair agencies

So, what are the most common advantages and disadvantages of employing a credit repair agency?

Advantages:

  • Better negotiation skills – agencies know what they’re looking for and what they’re talking about. They have the experience you lack, so if you are feeling uneasy about correcting your report, perhaps consider having someone do the job for you.
  • The process is faster – filing a dispute on your own may take much longer than it would take a professional. If you have the funds to spare and need to see a quick amendment, it may be worth seeking help.
  • Handy expertise – credit agents work with banks, lenders and credit reporters on the daily. As a result, they may have much more access to documentation and connections than you would have, trying to make a dispute on your own.

Disadvantages:

  • Scams – make sure the agency you employ is legitimate, as there are companies in circulation seeking your money without any accompanying services.
  • Upfront fees – if one of the issues on your credit report is debt, you probably don’t have the extra funds to spend on one of these agencies. Please keep this in mind as you should not seek to increase your debt any further.
  • Lack of control – using a credit repair agency may remove your control over the process. The company you choose will most likely have their say on any additional money loans and your spending habits. If you like to remain in control of your actions, this may be frustrating.

Can you fix your credit score without an agency?

You can conduct your credit repair Australia through the steps mentioned under ‘How can you improve your credit.’ However, it may be a better option for you not to employ the aid of a credit repair agency depending on your financial situation. There are also steps for improving your credit that agencies don’t focus on heavily, such as credit file maintenance for the future and budgeting aspects that you may prefer to do yourself.

Further research surrounding how to improve credit score Australia can help to provide you with all the knowledge you need to build a better credit report.

How long does it take to rebuild a credit score?

The time it takes to repair credit history Australia, is dependent on the state of your report. If, for example, you have a serious credit infringement that will stay on your credit file for seven years, you probably won’t have a clean record until that seven years is up. However, you can ensure you pay off your serious credit infringement and have it downgraded to a default, reducing the time it will be shown.

Steps like this can speed up the process of credit repair Australia. It all depends on how soon you can have your debts repaid, and begin to take proactive measures to correct your credit score.

Credit repair Australia: Do you need a credit card?

For young adults beginning their financial journey, a good measure of preventing debt accumulation from the get-go is avoiding a credit card. If you do not need to borrow, you do not need a credit card.

Early in life, creating good credit habits will ensure that credit repair is not an issue you will ever have to face. Most of Australia’s services now take debit as well as credit, and online shopping can also be done with debit.

Not having a credit card also reduces your temptation to spend. If you are a shopping lover then you should adopt the mentality that if you can’t pay it from debit, you can’t pay it from credit.

However, if you are a responsible spender, there are some reasons to hold onto your credit card. Credit cards, depending on the card you choose, can offer you some benefits if you use them correctly and don’t let your repayments become debt. They can work as a bit of extra cash to get you through to payday, and they can help you build up a good credit history if you are responsible.

Finally, keep in mind that good credit can also be built through paying your rent, phone bills, and utilities on time.

Can you still take out a loan with bad credit?

While you should avoid borrowing when repairing your credit score, as to not increase the debt you are in, some lenders may lend to you despite your bad credit. In short, bad credit loans are any loans where the person applying has:

  • Missing repayments
  • Applied for credit too often
  • Defaulted on credit
  • Declared bankruptcy or a debt agreement

At Monzi, we work with a few lenders who consider offering loans for bad credit from $300 to $10,000. In short, lenders may look at more than just your credit report to determine your outcome. As a guide, this may include your current budget. However, approval is not certain.

So, apply and we may be able to pair you with one such lender today. Let’s go.

Credit repair Australia and no credit check loans

If your credit history isn’t the best then you may be considering no credit check loans. As the name suggests, these are loans where the lender will typically not access your credit report. Instead, they will look at your bank statements for the previous 90 days to determine your reliability.

No credit check loans will still appear on your credit report, which is critical to keep in mind. However, these types of loans can involve unreputable lenders and unaffordable repayments, which is essential to keep in mind.

It is also important to note that guaranteed approval loans do not exist legally. You must still provide the necessary documentation for consideration by any lender you choose.

Finally, keep in mind that most lenders will not offer loans without a credit check. As a result, the availability of these loans may depend on the lender you are dealing with and we cannot guarantee if they will be offered to you.

Personal loans and Monzi

If you are, perhaps, in a financial emergency, or a position where you need a quick loan to get you by, then consider applying with Monzi. Naturally, you should avoid relying on credit, but Monzi understands that sometimes you may need a helping hand.

In short, Monzi is a 100% online lender-finder service. That means we seek to match you with a lender who can potentially assess your application and offer the loan you need now. However, approval is never certain.

At Monzi, we work with lenders who may offer personal loans of up to $10,000. See the table below for details of the loans that may be offered by our lenders.

Loan amountLoan termSecurity required?
$300 to $2,00012 monthsNo
$2,100 to $4,60013 to 24 monthsYes
$5,000 to $10,00013 to 24 monthsYes

Lenders may vary in their terms. The actual terms of your cash loan may not reflect the above table. Check your eligibility before applying.

Credit repair Australia and Monzi

Unfortunately, Monzi is a lender-finder service only. As a result, we won’t be able to help you repairing your credit. That said, we’ve done what we can to outline how you can potentially go about it.

However, for further details or questions about how this information may apply to your situation, it may be best to contact a qualified financial counsellor. For instance, you could call the National Debt Helpline on 1800 007 007 or visit their website here.

Help us, help you

Apply with Monzi today. Use our loan slider at the top of the page to begin your application now.

If you have any questions about our services or credit repair Australia, get in touch with our customer service team at hello@monzi.com.au or submit a contact form as we’d love to hear from you. And don’t forget to keep in touch with us via our Facebook, Instagram, Twitter and Pinterest.

Factor In

Costs

Two credit cards
Two credit cards

You won't use a penny to apply for our lender-finding service, but here's some costs you could expect from a lender

Loan amount

$300 - $2,000

Terms

12 months

Costs

20% upfront establishment fee

+ 4% monthly fee

Example

Loan Amount of $1,000 over 6 months repayable weekly (25 weekly repayments). $1,000 (Principal Amount) + $200 (20% Establishment Fee) + $240 (fees based on 4% per month over 25 weeks) = $1,440 total repayable in 25 weekly installments of $57.60.

Under the current legislation, most small personal loan providers don’t charge an annual interest rate (you’ll know this as an APR) %. The maximum you will be charged is a flat 20% Establishment Fee and a flat 4% Monthly Fee. The maximum comparison rate on loans between $300 and $2000 is 199.43%. This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate

Loan amount

$2,001 - $4,600

Terms

13 months

24 months

Costs

48% annual percantage rate

67.41% comparison rate p.a.

Example

Loan Amount of $3,000 over 18 months repayable weekly (78 weekly repayments). $3,000 (Principle Amount) + $400 (Establishment Fee) + $1,379.06 (reducing interest) = $4,779.06 total repayable over 18 months with weekly installments of $61.27.

The Interest Rate for Secured Medium Loans is 48%. The Typical Comparison Rate is 67.41% p.a. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Click here to see a worked example.

Loan amount

$5,000 - $10,000

Terms

13 months

24 months

Costs

21.24% annual percantage rate

48% comparison rate p.a.

Example

Loan Amount of $10,000 over 24 months repayable weekly (104 weekly repayments). $10,000 (Principle Amount) + $5,577.12 (Interest) = $15,577.12 total repayable over 24 months with weekly installments of $149.78.

The Interest Rate for Secured Large Amount Loans is 48%. Maximum Comparison Rate is 48% p.a. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Click here to see a worked example.