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As a former broker, I know the hills you often need to climb to get deals over the line. One of those obstacles can be bad credit. When everything else stacks up – bad credit can be a deal breaker.
So naturally at some stage as you struggle with clients who would qualify apart from their bad credit, you may find yourself considering credit repair and its benefits to your clients.
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So what is credit repair? For those that don’t know, credit repair is working on behalf of a client to assist in disputing an inconsistent credit listing or listings. Credit providers will only make corrections in accordance with the Privacy Act 1988 (Cth).
The information on the client’s credit report must be inaccurate, out-of-date, incomplete, irrelevant, or misleading to be removed. A credit repairer’s job is to find and argue inaccuracies in credit reporting.
I would love to say that every firm educates clients and brokers in this way. But in reality there are a whole ton of broken promises, misleading statements and at times out-and-out lies permeating the industry.
This can make it harder for clients to find those firms which have genuine skill and experience in the industry and who will act with ethics and integrity. Some brokers have a direct referral system with a reputable credit dispute firm for that reason. But if you don’t, how do you make sure your clients aren’t going out there blindly and making costly mistakes?
Here’s what your clients should know about credit repair:
1. Cheaper does not mean better
The cheaper the price, the less work that is probably being done on the credit file. We allocate about 28 working hours to each case because that is the average time frame involved if the job is done correctly.
2. Nothing is guaranteed
There are no guarantees with this type of work, but a firm should not take on someone they don’t believe they have a good chance of helping. This comes down to having trust in the firm you are recommending as well as the firm having a rigorous assessment stage. Clients should also be looking for published success rates and testimonials as evidence of a firm’s success.
3. Get it right the first time
Your clients may only have one chance to get it right. When clients have already used another company or have done some of the work themselves, it can place limitations on their case.
4. The ombudsman should be the last resort
Any credit repairer worth their salt should have access to more avenues of investigation and dispute than what an industry ombudsman can provide. They should be pursuing these before seeking an ombudsman’s assistance.
5. Beware of imprints
Be careful of firms which leave imprints on the credit file, as this could instantly undo all the work done in removing the credit listing.
6. Lawyers can help
A law firm will have the added protection of a state law society. A lawyer can act in court processes including the removal of judgment and writ services, which is something a non-lawyer can’t do. A lawyer can also identify and advise on legal issues; prepare binding agreements, conduct formal negotiations and then follow through with enforcement where necessary; make formal recommendations to credit providers making reference to the law, and make representations on their client’s behalf.
While credit reporting mistakes continue to come up on client credit files, there will always be a place for skilled credit reporting advocates in the finance industry. As brokers, more education about credit reporting can give you the power to contribute to a solution for the credit repair industry, and assist in minimising the current problem.
