According to MyCRA Lawyers, banks and other lenders are using comprehensive credit reporting (CCR) to charge investors a higher rate of interest.
MyCRA Lawyers CEO Graham Doessel said mortgage holders who have paid bills late are having marks against them, which allows the banks to charge them more.
MyCRA Lawyers explained every time a bill is paid 14 days or more late, it’s recorded with a mark ranging from 1 (if the bill is 14-30 days late) to 5 (if the bill is five months late) with anything over six months being marked as an X on your credit report.
“Just a 1 on your file will be enough for a bank offering the best rates to ratchet up their interest or reject you and force you to go see a second-tier lender, and trust me you don’t want to go there,” Mr Doessel said.
If your credit rating is bad or less than perfect and you have got some enquiries on your file, the bank may use this to up your interest.
Mr Doessel suggested that, in most cases, these can be removed due to a credit provider needing your permission, which could have been given when agreeing to the terms and conditions on their website.
“The savings can be huge, depending on the size of your loan, we are talking tens of thousands of dollars a year, and over the life of a loan the savings can go into the hundreds of thousands of dollars,” Mr Doessel said.
Mr Doessel said the easiest way to clean up a comprehensive credit report was to pay bills on time, don’t default on loans and, most importantly, don’t shop around for credit by entering details and seeing if you are approved.
“You can get a list of the best lenders from a host of websites whether it’s home loans, credit cards, personal loans or buy now, pay later services. You don’t need to give them your details until you are ready to move forward with a purchase,” Mr Doessel concluded.
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