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Can you fix your credit rating?

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Can you fix your credit rating?

Have you ever been curious about credit repair servicesproviders that claim to fix, clean or repair your credit rating? Can they really fix your credit rating?

For a ‘small’ fee these companies claim to clear away black marks and improve your likelihood of being approved for a loan. But can you actually fix your credit rating?

Can you really fix your credit rating?

The answer depends on the situation. Credit repair companies investigate negative inquiries or black marks on your credit report. They usually charge per listing to remove black marks or fix negative inquiries on your credit report, as well as an administration fee per listing. Not all attempts to fix your credit report may be successful and with a growing number of companies providing these services in Australia, the opportunity for less than reputable companies to take your money to ‘fix’ your credit report without any positive result is a real risk to be aware of.

Guaranteed credit rating repair? Think again.

There is no guarantee that an investigation into inquiries on your credit report will lead to their removal. Black marks (which include excessive credit inquiries within a year) if legitimate, cannot be removed from your credit report. Plus it’s important to note that a default, even after the loan is paid off, remains on your credit report for 5 years. If credit inquiries are incorrect they can be removed from your credit report but an unfavourable credit history cannot be fixed by a credit repair service no matter how much you pay them.

You can improve your own credit rating, free of charge

The reality is credit repair services aren’t doing anything you can’t do yourself for free. If you believe you have received a default in error, you can lodge a complaint with Equifax to be investigated free of charge. Equifax is a data intelligence agency that services the Asia-Pacific region and houses information on people and organisations to allow financial institutions and lending agencies to make responsible lending decisions. It is also available for individuals to manage their credit profile. There are stories of people using credit repair services to fix their credit rating. The process of disputing and removing incorrect inquiries on your credit report may improve your chances of being approved for a loan.

Our advice is if you are interested in fixing your credit, refer to Equifax’s Resolution Centre. Equifax is a reputable resource and can help you dispute incorrect listings on your credit report. Or, if you are considering using the services of a credit repair company, research them thoroughly to ensure they are a credible service provider. Have you used a credit repair service to fix your credit history? What was your experience? Comment below.

Essential Points

  1. Review your lifestyle and consider whether you need the stability of a fixed rate for the next 1, 2 or 3 years
  2. Be sure to ask about fees associated with switching between fixed and variable interest rates (they can be costly and might sway your decision)
  3. Consider if you will have easy and affordable access to a redraw or offset facility?
  4. Remember that over the long term, the difference between fixed and variable home loan interest rates is less significant that you'd expect

Want to know more about fixing your credit rating?

Download our fact sheet on Fixing your Credit Rating, access your credit report free of charge or visit Equifax's website to read more about credit scores and credit reports.

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