People with a bad credit file aren’t bad people. And credit repair agencies aren’t trying to get them out of their financial obligations.

This is the feedback I sometimes get. In my opinion it’s a completely erroneous view that persists with some people in the community – that people with bad credit are bad people. No, they’re not.

I sometimes hear this from people in my family who think we are doing the wrong thing by helping “those people”. I hear it from some brokers who just discard the client if they have an impairment on their credit file because, no, they don’t deal with “those people” – all their clients are squeaky clean. I even hear it from people at church – yeah, that’s right, at church – which claims to be the soft place to fall for people in need.

So who are all these bad, bad credit-impaired people? Well, they are probably your relatives, friends and neighbours, perhaps your work colleague, or maybe even your friendly professional. Because one in five people that walk past you in the street have an impairment on their credit file. Last month we assisted a broker as well as a barrister. We also had the CEO of a large company whom we helped.

People are pretty good about hiding their difficulties from others because of the shame that is associated with being in financial distress. But as advocates, we are trained never to judge a potential client. Certainly not even after hearing their side of the story. We investigate their situation and verify their version of events by looking at the hard data that we ask the credit provider to produce.

Because, let’s be honest: we generally don’t deal with multiple serial financial offenders. In fact, in the six years we have been trading the average number of “black marks” (defaults or judgments) on a credit file that we see is 1.38. Most credit files that we see have a single listing only. Very rarely do people have 10 or 15 listings. And even if they do this may or may not indicate that the client is a serial offender.

As for those 1.38 black marks, they are usually caused by quite predictable circumstances. The top reasons why people get these listings is a divorce, a recent separation, an illness, an accident or a job loss. Sometimes people can’t speak English and don’t understand their obligations. Other times they are nursing ill family members and dealing with absolutely tragic circumstances. They are not bad people.

To provide a bit of evidence for this, Beyond Blue says that almost 45 per cent of Australians will suffer with a mental illness at some point in their lifetime. That’s a lot of people. The Australian Bureau of Statistics recorded that there were 47,638 divorces granted in Australia in 2013. That’s a whole world of pain, separation and needing to split your financial arrangements.

And just a note about the idea that we are trying to get people out of their financial obligations. It’s simply untrue. Every day we orchestrate accounts being paid, payment plans being set up, obligations being met. We help consumers to get their debts paid and credit providers to get their money. So look around. Credit-impaired people are not as bad, or as rare, as you think.

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