Merrilyn Mansfield of Princeville Credit Advocates clears up misconceptions about credit repair
1 CREDIT REPAIR HELPS BROKERS WRITE MORE LOANS
CASE STUDY: Aggregator wrote $60 million more in loans as a direct result of sending credit-impaired clients to a credit repair company to repair their credit files. Once they were repaired, the credit repair company sent the clients back to the brokers, who then had approved $60 million more in loans. The credit repair company was 92% successful in repairing the credit reports of this aggregator’s clients.
There is a common misconception in the broker world that it is best to show a credit-impaired client the door. Many brokers report not wanting to waste time with these clients because they think working through their issues is going to be time-consuming. And they also think the credit-impaired client must have deserved their poor credit rating. But one of the largest aggregators in Australia has taken a very different view, and with outstanding results. This group has written $60 million more in loans because they sent their credit-impaired clients to a reputable credit repair company that achieved a 92% success rate when clearing the credit reports of their credit-impaired clients. The benefit to the broker is that every lead, impaired or not, can potentially turn into a deal.
This builds a reputation that brokers are “can do” brokers who look after their clients. It also increases the broker’s profile in their organisation as someone who is writing a high volume of loans from a wide variety of leads.
2 CREDIT REPAIR IS HIGHLY SUCCESSFUL IF YOU USE A REPUTABLE COMPANY
Brokers are sometimes suspicious about how credit repair works and if it can really assist their clients. The last thing a broker wants is to refer a client to a credit repair company who charges high fees and makes promises they cannot keep about the time it takes to do the repair.
In this scenario, the client quickly starts to hassle the broker when the deadline passes, and the broker doesn’t have the time or energy to deal with it.
But credit repair performed by experienced and committed credit repair companies works most of the time. These companies charge realistic fees, give average timeframes for the work, have high success rates (over 80%), and make no promises they cannot keep. They employ skilled negotiators to do the work – people who will fight for your client’s right to a correct credit file.
But I hear you ask: ‘How does credit repair work? And how can these listings be removed?’ The reason these listings can be removed is that they were placed in error in the first place. The client should never have had a default, judgement or writ placed on their credit file.
Credit repair companies ask credit providers (financial institutions, energy and Telco companies, for example) to verify that they followed the rules when they placed the adverse listing. Reputable credit repair companies report that credit providers do not follow the rules in up to 80% of cases, so the listing must be erased from the credit file.
3 CREDIT REPAIR IS EASY FOR BROKERS
Brokers sometimes think that referring a client for credit repair will create unnecessary hassles for them. They do not want additional paperwork, nor do they want a client hassling them about the outcome of their credit repair case. Some brokers are also concerned that credit repair companies might sell their lead on to another broker to write the loan after the credit repair is done, or that they write loans themselves.
But reputable credit repair companies have relationships with brokers whereby the broker refers a client to them, the credit repair company does the credit cleaning for that client (keeping the broker in the loop), and then the credit repair company tells the broker when the file is cleared so they can write a loan.
Some less-savoury credit repair companies offer credit repair to capture credit-impaired (and often vulnerable) clients and offer them high-interest loans. They have no intention of fixing the credit report because their interest is in writing a high-interest loan. Reputable credit repair companies know this because they get all their failed clients credit repair work.
Reputable credit repair companies do not write loans and they do not sell one broker’s leads to another broker. They build relationships with brokers based on trust and excellent results.
4 CREDIT PROVIDERS ARE THANKFUL FOR CREDIT REPAIR
CASE STUDY: Credit repair company receives a letter from NAB thanking them for ‘getting the facts straight’ and removing a default listing from a credit file based on the case put by the credit repair company.
Because there is a defined process that credit providers must follow prior to placing a listing on a credit file, they are often thankful when we alert them that one of their processes has failed. They are often keen to rectify this situation as quickly as possible because they understand the consequences of having an adverse listing on a credit report (high interest rates or not being able to get finance at all).
Reputable credit repair companies work closely with credit providers and build relationships with them based on the rules that relate to credit reporting. They understand that credit repair companies are advocating on behalf of consumers because they have a legitimate right to a correct credit report.
5 CREDIT REPAIR IS NEEDED BY MANY AUSTRALIANS
One in 10 Australians have an adverse listing, or “black mark”, on their credit file that prevents them from getting the loan they deserve for a car, house or their business. These black marks can stay on credit files for up to seven years, even if the outstanding debt was paid. This is especially bad news because not only could your client’s finance be rejected, but these black marks can trigger higher application fees and higher interest rates on a loan.
Credit repair companies specialise in removing negative credit listings (defaults, judgements and writs) and have helped thousands of Australians with credit file issues and put them back in control of their finances.
In the UK, where positive credit reporting has been in place for 10 years, one in five citizens has an adverse listing on their credit report. With positive credit reporting having begun in Australia last month, the numbers are likely to match the UK before long.
Now is a good time to build a relationship with a credible and respected credit repair company to assist your clients with their credit repair needs. It will ensure you write the maximum amount of loans.
Dr Merrilyn Mansfield is a consumer advocate with Princeville Credit Advocates, and a theologian and historian. She is currently studying law. She is fascinated with the credit reporting laws in Australia and the UK and works in both countries to implement these laws for the benefit of credit impaired consumers and companies. Please call the Princeville team on 1300 936 363 or inquire at www.wemend.com.au for confidential advice and assistance.