What Can and Cannot be Fixed on Your Credit Report

how to fix bad creditYour credit report plays a major role in your ability to obtain credit from various lenders.
It is important to your financial future that you ensure that all of the information in your credit account is accurate and up-to-date.

It is important to realise, however, that while errors on your credit report can be fixed, there are many things that cannot be removed from your account.

Obtain Annual Credit Report
The first step to making sure that your credit report is accurate is to make sure you obtain a copy of your report on an annual basis. You are entitled to one free copy of your credit report each year, but it may take up to 10 days to receive. If you want instant access, you can pay a small fee to view your report online. Be leery of companies promising to obtain your credit report for you for a fee because some of these companies are frauds. It is better to go directly through the credit reporting agencies to receive your free copy.

Check for Errors
Once you obtain your credit report, you need to thoroughly check the report for any errors. Start by checking your personal information and make sure that everything is accurate. Next, look over all your loans and credit accounts to make sure that you actually took out all the loans and accounts. Check to make sure that all of your balances are correct and there are no accounts wrongly placed in default. You should also take a look at the list of credit applications to make sure that you actually applied for all the listed credit accounts, and look at the list of third-party inquiries which may alert you to who has been looking at your account.

Errors Can Be Fixed
Any errors with your personal information can be corrected directly through the credit reporting agency. They can also fix any duplicate account found on your report. If, however, there is an error with a certain credit account or loan, such as an incorrect outstanding balance, wrong dates, an account wrongly placed in default, or you were not notified of your outstanding balance, you need to contact that specific lender. Explain the error and ask the lender to contact the credit-reporting agency to fix your account. You should follow up any phone conversation with your lender with a letter in writing asking them to fix the error on your credit report.

If your creditor is not cooperative, you should contact Ombudsman for help. They will work with you to try to fix the error on your credit report.  They can help with various types of creditors, such as credit card companies, financial institutions and utility companies. You can also file a complaint with the Office of the Australian Information Commissioner (OAIC). They will investigate the matter for you and come to a final determination.

Information That Cannot Be Fixed
It is important to note that there is a lot of information in your credit report that cannot be fixed. For example, if you were in default on one of your loans, but have now paid the loan off, the initial default cannot be removed from your account for five years. Once you start making payments on your defaulted account, this should be marked on your account, and when it is paid in full, the account should be marked appropriately. However, the fact the account was in default at some point cannot be removed.

Likewise, any loans, credit cards, or other credit accounts will remain on your credit report for a total of five years whether it is paid in full or not. While this information cannot be removed, it should be updated on a regular basis, so always make sure that the figures included on your report are accurate. Lenders will look favourably upon your credit report if they see signs that you are trying to pay off your outstanding debt and bring all of your accounts up-to-date.

Misleading Credit Services and Scams
You should be leery of any company promising to repair your credit report or remove items from your report.  Many of these companies charge a large fee, that can be as much as $1,000 to do the same thing you could do on your own for free. They may also charge you additional fees for contacting Ombudsman on your behalf, even though Ombudsman offers their services free of charge. If they claim that they can have things removed from your account, this is incorrect. As long as the information on your account is factual, you will not be able to have it removed just to make your account more favourable.

In addition there are many businesses that will offer credit repair services as a means to get you to contact them at which point they will try and sell you on another service – such as debt consolidation or bad credit loans.

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