Credit repair agents and credit defaults (March 2017)

A credit default on your personal credit file can limit your ability to access credit and apply for a loan. It can also be a barrier when signing up for an electricity or gas account with some retailers.

People are often unaware they have a credit default until being told they have been unsuccessful for a loan or credit card application.

Credit defaults – if correctly listed – can remain on your file for between five and seven years. The removal of a credit default can only be undertaken if it is proven that it was placed incorrectly by the creditor or that the creditor did not follow the required steps when attempting to recover debt.

Repairing credit files and removing defaults

Credit Repair Agents (CRA) advertise services claiming to ‘repair credit files’ or remove credit defaults. EWOV strongly recommends not using these services when it comes to unpaid energy or water bills. There are often high fees associated with using these services and there are no guarantees that they will be successful in removing defaults if they have been correctly applied.   

EWOV is a free service and we can investigate if a credit default was applied correctly or if the creditor (electricity, gas or water company) has used incorrect information or placed the credit default incorrectly. We can request that the energy or water company remove the default if it is found to be placed incorrectly.

We regularly receives complaints from CRA representatives acting on behalf of energy and water customers. They will request the removal of credit defaults using our free service. By the time a CRA has contacted us on a customers’ behalf, it is likely that the customer has already signed a contract and made payment. We are not able to request that customers are refunded as we do not have jurisdiction over CRAs.

Help with credit defaults

Services like the Financial Ombudsman Service, the Telecommunications Industry Ombudsman and the Credit and Investments Ombudsman are also able to investigate complaints about credit defaults for consumers for free.

Some Credit Reporting Bureaus (CRB) offer monitoring services where, for a monthly fee, you will receive alerts about any changes to your credit file. However, you are also entitled to access a free copy of your credit file once a year as well as under the following conditions:

  • If you have applied for, and have been refused credit, within the past 90 days.
  • Where your request for access relates to a decision by a CRB or a credit provider to correct information included in your credit report.

How to access your credit file

It is advisable that you maintain awareness of any activity on your credit file. There are four national CRBs and one for Tasmania:

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