5 things to consider when choosing a credit repair agency
Credit repair and debt management have recently undergone an overhaul. But how do you choose a company to partner with? Peter Cole, Director of Clear Credit Solutions, presents five considerations for brokers.
“There is nothing more frustrating than putting a lot of time, work and effort into a customer’s request – only to fail at the last hurdle when you find out they have a bad credit score,” Nectar Mortgages chief executive Stephen Harris said in July this year. after announcing that he had signed a partnership with Clear Credit Solutions; his very first partnership with a credit repair agency.
Many brokers have been burned by unethical credit repair agencies in the past – which is why Nectar said he has been reluctant to partner with credit repair agencies before.
Unfortunately, many brokers have had bad experiences with credit repair agencies, which made them think twice before recommending clients.
In fact, the main reason brokers are reluctant to use credit repair services or refer their customers to these services is that it could jeopardize their “brand”.
To help clean up the industry, ASIC now requires all credit repair agencies have (or, at least, have applied for) an Australian credit license, as of July 1, 2021.
In general, there are five big things brokers should be aware of when choosing a credit repair agency. Brokers should be wary of agencies that:
- Charge hidden fees and
- Charge variable fees
Brokers should be careful when referring their clients to a credit repair agency that charges hidden fees or variable fees. The agency’s pricing structure must be transparent, so that your client does not have any unpleasant surprises.
Also, the agency should only charge one flat fee – there shouldn’t be any additional charges, as, again, this can shock the bill.
Having a transparent fee structure with a FULL refund with no admin or default fees ultimately protects your brand.
- Have poor communication
Brokers should be wary of partnering with a poorly communicating credit repair agency.
When a broker refers a client to a credit repair agency, the broker should be regularly informed of the client’s progress. This way the broker will know when the customer’s credit has been repaired and the customer is ready to return to their loan application.
But if the broker is not updated, the client may wonder why the broker is not calling and taking their business elsewhere.
- Steal clients from the broker
Brokers should think twice before sending referrals to a credit repair agency that has an in-house broker. Otherwise, the agency could steal the client.
- Have no reviews or negative / questionable reviews
Brokers should pay close attention to the advice of a credit repair agency. If the agency doesn’t have reviews on sites like ProductReview and Google Reviews, that should be a wake-up call.
Other red flags are when a credit repair agency has reviews, and they are either bad or so ridiculously good that they have clearly been bought.
Finally, the main thing brokers need to know is that if a client is unable to get a loan because they have a problematic credit history, a credit repair agency can only remove incorrect listings. of this credit report – the agency cannot remove information that is accurate and legitimate.
So beware of referring your clients to agencies that seem to suggest otherwise.
Peter Cole is the Director of Clear Credit Solutions, a credit repair agency that has won the Credit Score / Credit Repair Services category at the annual ProductReview Awards for three consecutive years.
Peter is a passionate supporter of the mortgage brokerage industry. He works with mortgage brokers across Australia, to help their clients repair their credit reports so they can qualify for financing.