Think twice before using a credit repair company

Our legal and financial counselling services have heard from a number of Victorians concerned about the behaviour of several credit repair companies. These companies may claim to be able to improve your credit history by challenging ‘defaults’ and having information removed from your credit report, and they can charge thousands of dollars for their services.

But you should think twice before using a credit repair company. Based on complaints we’ve heard, Consumer Action is concerned that some these companies:

  • charge large fees for a service that most people could do for themselves;
  • overstate their ability to improve a credit report—in most cases, default listings and other information about your credit history cannot be removed from a report unless it is proven to be wrong; or
  •  have contracts that contain unfair terms, such as excessive termination fees.

We’ve also had complaints about some of these services withdrawing funds from consumer’s bank accounts without authorisation, or where the consumer had already indicated their intention to cancel a contract

Remember that you can get a free copy of your credit report from Dun & Bradstreet or Veda and that you can challenge anything on your report which you believe is inaccurate or unfair by making a complaint. In the first instance, complain to the credit reporting agency—they may be able to fix small errors straight away or help you take steps to make a change.

You can also contact the company that made the listing on your credit report. If it doesn’t fix the problem, complain to the independent dispute resolution or ombudsman service that the company belongs to. Information on ombudsman services is available here.

Further information about credit reports and how to correct errors is available at MoneySmart or by ringing MoneyHelp on 1800 007 007. You can also seek free and independent legal advice here.

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