As of February 14 2020, civil court filings can no longer be listed on credit files and will be removed; a move that is set to boost the credit scores of tens of thousands of Australians, according to a statement released by the consumer and financial law firm, MyCRA Lawyers.
Going forward, only credit-related judgments can be recorded on someone’s credit file. This is very good news indeed for those who have had their credit scores impacted by civil court rulings, which can have a detrimental impact on your credit score even if the case in question was relatively minor.
“We’ve had a client with a business employing 120 staff almost sent to the wall because of a trivial dispute with their pool repairman,” said MyCRA CEO Graham Doessel^.
According to Doessel, mortgage brokers have been frustrated for years by seeing their clients have their bank funding cut off or rejected “because of trivial and vexatious civil court actions that judged them guilty until proven innocent”.
The change may allow these people to potentially get credit where previously they may have been rejected or to be able to negotiate lower interest rates with lenders. If you previously had civil court filings listed on your credit report, it is recommended that you check your credit file post 14 February to see if these have been removed.
Other ways to boost your credit score
Apart from this change, there are some other ways that you can work on to boost your credit score.
Try and negotiate with lenders
If you have a debt that has left a black mark on your credit history, it is worth contacting the lender directly to see what you can do to resolve the matter. They may be willing to settle for a partial payment and reclassify the debt as paid. It’s always worth trying to come to an agreement as, if you are successful, having a bad debt removed can potentially have a positive impact on your credit score.
Keep your credit history clean to begin with
Always paying at least the minimum due on your debts and avoiding late payments is the best way to avoid blemishes on your credit report. If you haven’t already done so, take the time to set up automatic payments wherever possible, so that you don’t accidentally skip any payments. If you have a serious debt problem, perhaps consider debt consolidation to help better manage your finances. Check out our other tips for keeping your financial health in good shape.
Check and correct your credit report
Possibly the fastest step you can take, if time is of the essence, is to check your credit report for any errors. Should you find any, such as incorrect late payments or defaults, you should dispute the error by calling the credit provider in question; ask them to fix the error and get them to confirm this in writing. Alternatively, you can also lodge a correction request with a credit bureau such as Equifax.
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Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstance before acting on it, and where appropriate, seek professional advice from a finance professional such as an adviser.