I started out, just like anyone else, with a clean credit history and no debt. But after some bad decisions and bad relationships, self destructive behaviour and no respect for my money I ended up a 21 year old with a dirty credit history. My life had only just begun and already I had smeared my good name with mud and rendered myself financially crippled for the next seven years.
I had been hiding under a rock for a while, not reading mail and dodging phone calls from collection agencies but eventually I knew I had to be proactive if I stood any chance of saving myself. I knew I was in a bit of trouble but I didn’t know how much, so I was advised to get a copy of my own credit file, so I could see where I stood.
You can get a copy of yours, even if you don’t think you have any issues it is always a great idea to check your credit file every couple of years, it’s free and its important to know if anything changes, especially if they are changes your not aware of.
http://www.mycreditfile.com.au/ is the website you need to visit, scroll down until you see “Free file, find out more” and click there. Fill out the form and it should take approximately 10 daysto get your file either via post or email.
I had a bad debt with a telecommunications provider that I managed to pay just in time before my ‘this will torch your credit rating’ date, but it had landed on my credit file anyway, which I would never have known about unless I had checked. I was so upset at this and called them to complain, the woman told me it was my own fault and offered me no help and because I didn’t really know any better I nearly gave up right there. I’m a pretty stubborn individual though and decided to fight them, I may have stuffed up, but not this badly and I’d done the right thing eventually and paid them.
It took a few weeks of phone calls between the telecommunications provider, the telecommunications ombudsman and Veda Advantage, but I did get it sorted and removed from my credit file. If you find something on your credit file that your certain is incorrect don’t ever give up without fighting hard, you can win and get things removed and I’m living proof!
Unfortunately though despite fighting to get one thing removed, I had stuffed up elsewhere and that debt had firmly landed as a giant dirty mark on my credit file and that would be where it was staying for quite a while! I paid it (with some help) and was advised it would stay on my file for seven years, so for the next seven years getting anything on finance was going to be tough. If debt’s go unpaid, they stay on your credit file for ten years.
I accepted driving the same car for the next seven years, no big deal and not being able to get a mortgage for the next seven years, wasn’t planning on that anytime soon anyway! Then I went to get a new phone service, I had a mobile but I needed wireless internet and in order to open a new service they have to run a credit check which I hadn’t even considered and of course I failed miserably. How embarrassed was I, walking out of a phone shop, head hung in shame because I had failed a credit check for a wireless internet contract.
I ended up with a pre-paid one of course and thankfully they don’t check your credit file every time you update your current phone and I have still been able to update every two years. When I moved in with my husband and we were planning a wedding and having a baby we joined things together like bank accounts, credit cards and phone accounts. For two years before my dirty mark disappeared I was a fully authorised representative on his phone account instead of having my own and whenever we wanted to add something it was done on his account and they checked his credit so I was safe. Our credit card was also in his name and I was simply an additional card holder.
During my time as a credit black sheep I did actually manage to borrow money, so I’m also living proof it’s possible to overcome a bad credit history even if it’s still current. I wanted to buy a business, a franchise infact and in order to do that I needed to borrow $35,000.00 it wasn’t easy, a hard fought battle infact, but I did it!
I am very lucky that I had my parents willing to assist as guarantor for my loan, meaning if I didn’t pay up, they were responsible for my payments, which never happened, but it made the bank feel a little better about lending me money. However despite this the questions were still asked as to why I had a default and I decided honesty was the best policy. I had to write a letter to the lender organising my loan and explain in detail how I got the default, why I got it and what I’d done about it and I told the truth, the whole truth and she responded better than I ever could have imagined.
Truth is; I was not in a good place when my default happened, living a toxic life, in an abusive relationship and I felt powerless to fix the situation and it had spiralled out of control. After reading my letter the lender called me to let me know she appreciated my honesty and could see I was making every effort to change my future and not be ruled by my past and she was going to approve my loan! I’d never been so happy to be in debt in my life!
My credit rating was clean again as of November 2013 and I was counting down the days, it had after all been a seven year long burden for me to carry and having that weight lifted was an incredible feeling. Hubby and I are now about to buy our first house and I finally know there won’t be any problems, questions or letters of explanation when it comes time to have our credit history checked.
Our credit rating is one of the most assets we as adults have, we give it so little thought and especially when we are younger we do such dumb things sometimes and trample our own good name without thinking. If I teach my kids anything about money it’s that protecting your credit file from default is one of the most important things you can do, if you don’t it will haunt you at what should be the most productive time of your life.
Have you ever had bad credit history? Or perhaps you won a fight over an unfair default? We would love to hear your story too!