http://www.debtfix.com.au/ News en-US hourly 1 http://wordpress.org/?v=3.5.1 New Australian Credit Requirements http://www.debtfix.com.au/debt-management-articles/article/new-australian-credit-requirements.html 17 March 2017, 1:30 pm Applying for credit cards, loans and mortgages just got a whole lot harder – or easier, depending on how good you are at making repayments. With amended privacy laws, new national credit reporting req

Continue reading ]]>
Applying for credit cards, loans and mortgages just got a whole lot harder – or easier, depending on how good you are at making repayments. With amended privacy laws, new national credit reporting requirements have increased to allow lenders access to a much more information about a customer’s financial history. This information includes positive data such as repayment history that will be given to credit reporting bureaus and lenders.

Currently, bureaus and lenders only provide negative data meaning they have limited access and visibility to a borrower’s current financial situation; lenders can only see the number of applications for credit, amount and type of credits, defaults, court rulings and prior bankruptcies. Thus, the inclusion of positive data can have an enormous impact on getting credit cards, loans, and mortgages. However, Experian – leading credit rating bureau, said that 2 in 3 Australians were not aware of the new changes regarding national credit reporting requirements.

Positive data isn’t yet being shared directly with lenders but is rather being shared with main credit bureaus such as Experian, Veda and Dun & Bradstreet. Thus, Australian credit providers can now access up to 24 months of borrowers previous credit repayment history. This ultimately means that the new credit requirement will impact applications for credit cards, loans, and mortgages. 

The Positives

Experian managing director Suzanne Steele called these new requirements an “overwhelmingly positive change for Australian borrowers”. The main positives include:

  • Positive data may aid potential first home buyers get loans and mortgages that previously had been declined as banks can now see their short credit history etc.
  • Inclusion of positive data may increase competition among lenders and force them to drive down credit costs as it will reduce the number of people who default on a loan.
  • Applicants that regularly pay their credit card and loan bills on time may find it easier to get more loans in the future.
  • Positive data will allows credit lenders a 360-degree view of borrower’s financial situation – allowing them to make a better decision with regards to the right level of debt that each borrower can manage.

Our Tips: 

  1. Make Your Repayments On Time – It’s now more important than ever to make your credit card, loan, and mortgage repayments on time as credits bureaus can now see your repayment history. We suggest a 3%-4% repayment of total balance which is just above the average minimum repayment each statement period.More Comprehensive Credit Reporting Upcoming in Law Reform
  2. Keep Your Credit Score Positive – According to Experian, 71% of Australians don’t know what a credit score is and had never checked it. As your credit score is an indication of your current and previous credit history – it can positively impact your ability to get a loan. 
  3. Avoid Multiple Inquires – Avoid submitting multiple credit inquiries within a short period of time but rather wait for replies and space it out.

Conclusively, the inclusion of positive data in credit reporting requirements is a step in the right direction for the Australian public. It can lead to fairer and more balanced lending practices – possibly creating an environment of less debt and tricky financial situations.

Read more about this upcoming law reform on the ALRC webpage. If you have any questions surrounding this change, contact one of our specialists in Debt Fix for further details. 

]]>
How to Stay on Budget When you’re in Debt http://www.debtfix.com.au/debt-management-articles/article/how-to-stay-on-budget-when-youre-in-debt.html 16 March 2017, 7:00 am All people should be taught the value of making a monthly personal budget. If handled properly, a good budgeting process can help people achieve their personal financial goals without an over-reliance

Continue reading ]]>
All people should be taught the value of making a monthly personal budget. If handled properly, a good budgeting process can help people achieve their personal financial goals without an over-reliance on consumer debt (personal loans and credit cards). In some circumstances, people who fail to budget in advance might find themselves having to work within a budget just to survive after getting too far into debt.

The Problems Associated With Too Much Debt

Once a person crosses the threshold of reasonable debt, personal issues are bound to enter the picture. These issues could range from stress all the way up to a potential bankruptcy should the debt levels become truly unmanageable. There's also the risk of reaching a point where creditors are no longer willing to lend, even in the case of an emergency. As debt escalates, the importance of getting back on track by budgeting becomes crucial. 

Things to Consider When Dealing With too Much Debt

Debt issues usually occur because people try to live beyond their means. If you are willing to admit you fall into this category, we can suggest several ways to get yourself back on track.

1. Downsize - Living beyond your means usually involves maintaining an apartment or home that is too expensive and/or driving a car that's too luxurious. It might also involve buying clothes at upscale stores when bargain clothes would suffice. The bottom line is you can start saving money by taking a realistic look at your lifestyle and making adjustments to bring it more in line with your income.

2. Increase Your Income - If you really like your lifestyle, you could always look for ways to supplement your income. This could be achieved with a part-time job in addition to your regular work or perhaps by starting a little side business that takes advantage of a skill set you might have.

3. Strict Budgeting - By preparing a strict monthly budget sans buying things you don't really need, you can begin to accumulate extra resources that can be used to start making larger payments against your debt. A budget is only good if you are willing to abide by it at all costs. Use our Budget Calculator and see if it helps you with your budgeting needs.

A budget is only good if you are willing to abide by it at all costs
4. Share Expenses - If going on your own is a bit more than you handle in the short-term, you might want to consider taking on a roommate or two to share expenses and help you create the funds necessary to pay down your debt. It doesn't have to be a permanent solution.

5. Seek Help From a Professional - If you feel uncomfortable with your debt situation, you would be well advised to seek help from our professional debt management company. Not only do we have the resources necessary to help you learn to live within a budget, but we might also be able to help you get some form of debt relief, which can remove your stress and help you get back on track.

You don't have to suffer from poor budgeting skills or financial choices. If you simply follow some of the suggestions above, you truly stand a realistic chance of getting yourself out of debt sooner, rather than later. By doing that, you can create a lifestyle that is both enjoyable and manageable.

]]>