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Credit “Repair”/Fix Services

Case Study

Mrs A wanted to apply for finance but found out there was a listing on her credit report by a Telco. Mrs A was in dispute with the Telco over the $500 bill. Mrs A rang a Credit Repair company. After the consultant took her bank account details they said there would be a $900 fee and that if the listing was successfully removed there would be a further $900 fee. Mrs A hung up and had a complete change of heart. She immediately called Fair Trading who told her to lodge in Telecommunications Industry Ombudsman (TIO) against the Telco, and she did so. TIO is a free ombudsman for complaints about the telecommunications industry. The Telco dispute was resolved by the following day so Mrs A advised Credit Repair that she didn’t want their help anymore and cancelled the direct debit authority. The company said that Mrs A was still liable to pay their $900 fee, even though they hadn’t done anything. They also said they were adding on dishonour fees.

Be wary of ‘credit repair’, ‘credit fix’ or ‘debt solution’ companies that claim they can ‘improve’ your credit report. These companies will charge you fees for services that you can do for free!

You should be aware that in most cases, bad credit history (default listings and information about late missed payments) cannot be removed from your credit report unless it is proven to be wrong.

Credit repair agencies typically charge very high fees, as much as $1,000 to fix one credit default listing. These fees often apply even if the company is unable to remove any default listings from your credit report.

If you have multiple listings on your credit report, remember that you may get one listing removed only to find you still cannot get credit.

A credit repair company may also ask an Ombudsman service for assistance in resolving your case. These Ombudsman services are free! The company will charge you a non-refundable fee for using a free service on your behalf, even if it turns out the default cannot be removed from your credit report.

If you are in financial hardship, the last thing you need is to pay a credit repair company $1000 to try to remove a default listing from your credit report that cannot be removed. This will only make your financial situation worse.

If you think you have had a credit default wrongly listed against you, contact the creditor (credit provider). If you cannot resolve the problem with the creditor, get legal advice and contact the relevant Ombudsman for free help.

Read our Factsheet on your Credit Report