There’s nothing like owning a ferocious guard dog for dealing with debt collectors. Chomp, chomp, chomp. There goes the arm of that dastardly fella.

Well, not really. Setting the dog on the debt collector isn’t going to solve your problems – it’ll just make them worse. Debt collectors don’t even taste that nice (or so we’re told).

It’s easy to stick your head in the sand when you can’t (or forget to) pay a bill. But leaving all those envelopes unopened or sneaking around to avoid the debt collector isn’t going to make your money problems go away. Leaving it just makes the situation worse. The only way for things to get better is to take action.

Know your rights

Debt collectors can’t just break your door down or take your car because they feel like it. We’re not living in the 19th century where you could be sent to the poor house. By law debt collectors can’t use or threaten physical force of any kind towards you, any member of your family or people connected with you; damage or threaten to damage your property; block access to your property or block your way; or remain on your property when asked to leave, unless they have a Court Order. If they do any of this, call the police.

They also can’t shout at or verbally abuse you (including making personal or demeaning comments), use obscene or racist language, and more (check out this ACCC document for the full list of no-nos).

Your privacy is a priority. Debt collectors aren’t allowed to reveal that they’re a debt collector or provide information about your financial situation to another person without your permission. They can contact you via social media, but they must be reasonably sure that you’re the only one using the account, so nobody else will see the message except you.

Debt collectors can visit you at home or work, but only if the debt arrangement can’t be worked out over the phone, by letter or email, if you don’t respond, or if your identity or location is in doubt. But if they visit you in person, they can only do so once a month, only between 9am-9pm, and never on national public holidays. There are strict rules for face-to-face visits, for example they must leave immediately if you ask them to, and they must respect your right to privacy in front of family members and third parties.

Debt collection is tightly regulated, so if they do any of this you’ve got the right to complain. First put it in writing to the debt collection company, then complain to the company’s external dispute resolution scheme (these vary depending on the company; refer to page 23 of this document for a full list). You can also complain to the Australian Competition and Consumer Commission (if it involves phone or utility bills, tradespeople or other service providers) or the Australian Securities and Investment Commission (if it involves loans, credit cards or other financial services).

If the debt isn’t correct…

If you believe the debt itself isn’t actually correct, advise the company concerned in writing as well as any credit reporting agencies and debt collection companies that may have listed the debt. If the debt is yours but the details are wrong (such as the amount), ask the company for an itemised statement that shows the amount; the date; how it was calculated; and details of any payments made and amounts owing. The debt collector shouldn’t try to collect money from you until you’ve got this information, and a default listing shouldn’t be put on your credit report while it’s in dispute. Get free legal advice asap.

Check everything thoroughly

As above, the ACCC and ASIC occasionally get complaints about debt collectors, such as misrepresentations about the right to collect the debt as well as incorrect debt amounts. So make sure you read all the paperwork, including your original contract, and check your bank statements to see if you have made payments. If anything seems amiss you can go to your solicitor, community legal centre, or local Citizens Advice Bureau for advice, and put it in writing to the debt collection company. If you disagree with something, it shouldn’t go on your credit record while it’s in dispute.

See a budget adviser as soon as possible

It’s hard, really hard, to think straight when your finances go wrong. Budget advisers don’t charge and they may have ideas you’ve never thought of or contacts that can help. Many community organisations and community legal centres offer financial counselling for free. They can help you work out a budget and potentially negotiate with a debt collector on your behalf.

There’s also a free financial counselling hotline available on 1800 007 007 from 9.30am-4pm, Monday to Friday, or click here to search online at Moneysmart for a counsellor near you.

Negotiate with your creditors before it’s too late

Lenders must consider a ‘hardship’ application, but this depends on when you took out the debt (more here and here). Once your debt has been passed to the debt collectors, making a hardship application gets trickier, so do it as soon as you can. Budget advisers will often negotiate with your creditors on your behalf. If not, front up yourself in person or by phone with payment plan that you can meet.

If you’re about to go bankrupt…

If you feel like your finances really are a dog’s breakfast, you can apply for a personal insolvency agreement, present a debtor’s petition, or enter a debt agreement. These are ways to settle your debts without becoming bankrupt. A trustee will be appointed to take control of your property and liaise with your creditors. The length of the PIA is negotiated between you, your trustee and your creditors, and there’s no debt, asset or income limits. This will affect your credit score and will be listed on your credit report. Sometimes learning from the grind of paying off debt may be more useful long term than walking away. The consequences of bankruptcy are severe. Don’t make a decision about bankruptcy until you’ve seen a financial adviser and/or a budget adviser.

Know your rights when it comes to dealing with debt collectors. And whatever you do, don’t stick your head in the sand. People can climb their way out of all sorts of financial holes. But only by taking action. If nothing else, call a budget adviser today for free on 1800 007 007.

The post Know your rights: What to do if you’re being chased by a debt collector appeared first on Credit Simple.

Imagine you’re on the cusp of getting a hot new job, and your prospective boss says they’ll need to do a credit check. You’re pretty sure there’s some bad info on there, and anyway, isn’t it a breach of privacy?

Fret no more, dear reader: we bring good news.

Firstly, it’s true that other parties can check your credit report – landlords, recruiters, telcos, insurance providers and utility companies, as well as employers. However, they can’t do it without your consent and knowledge. Credit reporting legislation gives you specific rights and information, including who can access your credit report and on what basis.

Employers are only allowed to access your credit report if:

a) it’s authorised by you;

b) if there’s a legitimate reason for doing so. That’s more than just cash handling – it should be bigger responsibilities such as accounts and financial administration. And they’ll need to get your consent first, to do a credit check.

While private information such as the amount of your mortgage appears on your credit report, employers are really looking for patterns of money mismanagement and unresolved debt. However, the biggest indication of that is insolvency, and anyone can search the bankruptcy register as that’s public information.

Key things to know:

• The prospective employer MUST get written consent to do a credit check on you. You of course have the right to say no.
• The credit reporter must log each ‘access’ that’s made to your credit file and let you know this information if you ask. These ‘accesses’ are included on your credit report.
• A credit report is different from a credit score. A credit score is a number that’s indicative of your financial health and responsibility, whereas a credit report is a full file containing details of defaults, court judgements, credit applications and more. An employer will want to access your credit report, not your credit score.

The best thing to do? Be prepared by checking your credit score and requesting your credit report.

The post Help! My new boss wants to check my credit report appeared first on Credit Simple.

An acquaintance said to me – rather smugly – the other day, “I don’t need to check my credit score, because I don’t have a credit history.”

“Oh, you don’t?” I said. “Have you checked it in the past and discovered you didn’t have a profile in the system?”

“No,” he said. “But I’ve never had any hire purchases or a car loan, so they won’t have anything on me.”

Many people think that a credit history is built solely from credit such as hire purchases, or from bankruptcies or court judgements. And indeed, when you go bankrupt or have a court judgement against you, or you default on something like a hire purchase payment, that goes onto your credit history.

Naughty stuff like this is what we call ‘negative’ information. But now there’s also ‘positive’ information, or ‘comprehensive’ credit reporting. That means that a lot more information now goes into your credit history.

“Do you have a power account in your name?” I asked. “What about your smartphone, and your home internet?”

Sure enough, it turned out he’s got all of these (and more) in his name. So I pointed out that it’s almost certain he indeed does have a credit history, because when you apply for power, phone, internet accounts (and so on), you check the ‘terms and conditions’ box, allowing that company to do a credit check on you.

All these things can go into the calculation that makes up your credit score. So as you make payments each month, that information helps to show how financially responsible you are, and it gives companies an idea of whether or not you’ll be a good customer for them.

On the flip side of the credit coin, what doesn’t go into your score calculation? Well, assets, wealth and income aren’t part of your credit history. You could own umpteen properties, earn squillions, have loads of money in the bank but have a bad bill payment history and have a credit score that’s in the mud. Or you could be financially poor and have an excellent credit score, because you’re meticulous about paying bills on time.

It’s all about how well you manage your finances.

The post So you think you don’t have a credit history … appeared first on Credit Simple.

We got an email the other day from a guy who actually said “help me delete my credit history”. He’d registered for Credit Simple, discovered his credit score was in the 200s, and decided the best thing was to just wipe it all off the history of the world, immediately and forever.

Great idea in theory. And many people point to other parts of the world where there’s such a thing as “the right to be forgotten“, where you can apply to have things wiped.

So here’s a few key facts:

• You can’t get your credit history deleted, because you gave the company and the credit reporting agencies permission to collect, share, and hold your information.
• However, you can access your private information held about you at any time, as well as ask for it to be corrected.
• Information you provide to get your credit score from Credit Simple won’t be disclosed for debt collection purposes.
• You can terminate your Credit Simple account by emailing us.
• Terminating your Credit Simple account means you won’t be able to access your account via the Credit Simple website, and we won’t contact you.
• Credit information available via Credit Simple is provided to you by illion (Credit Simple’s parent company). It’s a leading credit reporting agency, which means it’s allowed by law to collect information on people applying for credit (more on that in a bit).
• When you apply for credit (such as a phone or power account, a credit card, loan or mortgage), you give permission for that company to do a credit check on you – it’s in the terms and conditions. That also gives them permission to share your information with credit reporting agencies. In the same way, when you use Credit Simple to request your credit score, you give Credit Simple permission to share your information with illion.

Finally, remember that a credit history can actually be a really good thing to have. It can show you can be financially responsible and handle your money. Companies looking to lend to you want to know if you’ll pay your bills on time  –  imagine having several hundred thousand customers who all paid a day late, for example! And they want to know you’ve got a track record for taking care of business.

You can check your credit score and credit information here. Got questions? Just email us, or get in touch at our social pages, below.

The post Help! I want to delete my credit history appeared first on Credit Simple.