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Franchise brokerage Nectar Mortgages has partnered with credit repair agency Clear Credit Solutions, as the pair has forecast others will follow suit under new laws.
Nectar brokers will be able to refer their clients to Clear Credit Solutions should they turn out to have poor credit. The collaboration could increase approvals for the company, with Stephen Harris, general manager at Nectar, commenting the partnership will “help those customers get loans”.
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Nectar stated that it had been reluctant to partner with credit repair agencies previously, citing unethical players in the industry.
But ASIC recently mandated that all credit repair agencies, along with other debt management service providers, needed to have an Australian Credit Licence from 1 July 2021.
The change formed a part of the government’s plans to overhaul responsible lending laws, with an aim to protect consumers from predatory practices. Debt management services are now a “credit activity” for the purposes of the National Consumer Credit Protection Act.
Clear Credit Solutions director Peter Cole commented that the agency was operating to high ethical standards even before it was compulsory.
He also believes the partnership could be the first in a new industry trend, predicting more brokerages could look to team up with credit repairers.
“Partnering with a quality credit repair agency provides better outcomes for borrowers,” Mr Cole said.
“So, I suspect we’ll see more partnerships announced now the ASIC regulations have come into force.”
The Nectar general manager commented that the partnership will benefit both the group’s brokers and customers.
“There’s nothing more frustrating than putting in lots of time, work and effort into a client’s application – only to fail at the last hurdle when you discover they have a poor credit score,” Mr Harris said.
“Now our brokers can refer these clients to Clear Credit Solutions to fix their credit problems. This, in turn, will help those customers get loans.”
[Related: Banjo launches bridging finance offering]
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