Credit Ratings

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It's the one list you never want to be on. A bad Credit Rating for most of us is worse than a prison sentence, with your life being put on hold for years.

With more and more Australians getting caught out, sometimes unfairly, for the first time, we can exclusively tell you which industries are the most cunning, at cutting you off.

"I have bad credit for seven years, over a bill I didn't even know I had," says Natalie.

"It's like being a prisoner for a crime that I didn't commit," explains Rochelle.

"They were clearly saying the problem wasn't theirs and we had to suffer for it," says Jeremy Humphries.

Three Strangers, three states, three mistakes.

"I think that the system could be improved."

Banished from Banks, cancelled from Credit. A Credit Default is a black mark against your name, that doesn't wash away. We've broken down the numbers to let you know which industries are most ruthless when it comes to writing you off.

So is it the Banks, the Utility Companies, Or the Telco's?

"Oh, it's definitely Telephone Companies," says Damian Karmelith, from Credit Rating Agency Dun and Bradstreet. "It's fair to say that Telco's cause consumers the most trouble,"

There's currently two million Aussies branded as credit lepers and here's who they have to thank for their Misfortune.

Even when you combine the thousands of products from the banks and credit companies, they still come third place defaulting customers- With nearly six-hundred-thousand referrals to the register.

Not far in front are the Utilities. The trifecta of Gas, Power and water when combined, accounts for nearly 650,000 names on the black list.

But the Telecommunications Industry is the most ruthless when it comes to writing off customers. It alone makes up for 700,000 Credit Defaults.

"For young Australians, a mobile phone is the first type of credit they've ever received in their life, and often they don't manage that as well as they should," says Damian.

Despite many Telco Bills being less than a few hundred dollars, Damian defends the industry's right to default claiming that the telephone bill is usually the first default of many.

"The truth is someone who defaults on a small bill is around about six-hundred-percent more likely to default again at some stage in the future. The problems with the telecommunications industry are really well documented particularly for young people," explains Damian.

Kat Lane from the Consumer Credit Legal Centre says that Telco's are quick to sign up anyone to a deal, regardless if they can afford to pay the bill. She want's tighter control of the industry.

"In my view, they're not even credit, they're not under the consumer credit legislation, they're not credit, and yet for the purposes of the privacy act, they're considered credit and they go on your credit report. To me that makes no sense and it's always made no sense to me," says Kat.

And it's not just industry groups complaining. The Telecommunications Industry Ombudsman has seen complaints exclusively about Credit Management more than double in twelve months, from 17,241 to 35,550 last financial year.

"A lot isn't even their fault. Mail goes missing, there's a default notice, they're in hospital, they were on leave, a whole range of reasons that are not even their fault can make it so you end up with a bad credit listing, and it's not you don't pay it, you just don't pay it on time," says Kat.

"Seven years I have to wait, to buy a house, my first home, I've saved for years and worked so hard," says credit rating victim, Rochelle Ryan. She wants to buy her own house but the bank knocked her back on a loan thanks to a credit black mark from Telstra. For a bill she didn't received, and was never given the chance to pay.

"I put an offer in for a house and I went down to the bank, my local bank, and went to sign more paper work, and they told me at the last minute that I had an unpaid black mark. I was flabbergasted, it's just impossible, absolutely impossible. I just couldn't believe what I was hearing," says Kat.

"They've never sent me a bill, they've never sent me a reminder. I still don't have a bill, I have no proof that I owe this money expect for their word," explains Natalie Lloyd, another victim of this credit rating debacle.

And it's not just the phones. Natalie Lloyd left her husband and in return, he left her a Power Bill she never knew existed, a bill that's going to keep her in the dark for years.

"My life's on hold. It's absolutely on hold for a minimum 5, probably 7 years. I can't buy a house, I can't buy a new car I can't do anything, literally I cannot do anything I'm just in Limbo," explains Natalie.

"And I said 'Can't you get it removed?' and she said 'No we can't'. It's actually Veda that has to remove it," says Natalie.

Jeremy Humphries learnt that it's not just companies that make mistakes, but sometimes the Credit Rating Agency themselves.

"There were various marks against my name via different companies like G-Credit, Bank of Queensland obviously, NAB Australia, Custom Fleet, Energex, which none of them were mine," says Jeremy.

Jeremy's now fighting Veda Advantage, who has wrongly listed hundreds of thousands of dollars against him, as he tries to clear his name.

"Well going on those figures it'd be near on half a mil, which aren't mine at all," says Jeremy.

"Most of the people who ring me only find out about their credit default on their credit report by applying for further credit. That's just the vast majority. So that tells me that the notice requirements are not working at all," explains Jeremy.

With so many mistakes, hundreds-of-thousands of Australians could be walking around with a bad credit rating, and won't know until it's too late.

Dun and Bradstreet say they can provide you with a free copy of your credit rating so you can fix any problems, before you're caught out. Get a copy of your credit report, have a look at it and make sure you understand it, so that before you apply for your credit you know where you stand.

If you wish to get a copy of your credit report head to
www.dnbcreditreport.com.au

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