| A while ago my cousin Nick (not his real name - he's a | | | | damage really was. Nick contacted an Australian |
| bit embarrassed by this story) stayed at my house for | | | | Credit Reporting agency (do a search to find one) and |
| a couple of months. | | | | by the next day his credit file was waiting in his email |
| Nick had decided to upgrade his vehicle so he inquired | | | | inbox. |
| with his local Credit Union about borrowing some | | | | The news was not good as indeed the Bank had |
| money. A week or so later he came home from work | | | | listed an overdue account, and to make matters |
| with a sad tale to tell about his loan inquiry with the | | | | worse the listing had not been updated to indicate that |
| Credit Union. It seemed the Credit Union was not very | | | | it had been repaid. Since in Australia any financial |
| keen on lending him any money, despite the fact he | | | | institution is obligated by law to advise a credit |
| had borrowed from the same institution in the past to | | | | reporting agency if an overdue account is |
| purchase his current vehicle, which had been duly paid | | | | subsequently paid, Nick was able to exert some |
| on time. The Credit Union claimed that another bank | | | | influence on the bank to ensure that they advised the |
| had listed an overdue account on his credit file, and felt | | | | reporting agency that the debt had been repaid. To |
| that doing business again was a risk they weren't | | | | date he is still waiting for final confirmation that this has |
| willing to take. | | | | been done. |
| Nick told me that when he went overseas he had | | | | If there is a point to this story, it would be that it's all too |
| mistakenly closed his savings account that the Credit | | | | easy for young people these days to obtain credit, but |
| Union had been drawing his loan repayments from. He | | | | education on the importance of maintaining a good |
| made other arrangements to pay the loan after his | | | | credit record is not quite so widely available. For those |
| Credit Union contacted him when he missed a loan | | | | of you with young children (and anyone wanting to |
| payment. Unfortunately though, the former bank that | | | | borrowing money now or in the future for that matter), |
| his savings account was with had allowed his account | | | | I offer the following pointers: |
| to become overdrawn by some $800 as a couple of | | | | - If travelling overseas, ensure that your mail is directed |
| loan repayments were posted to the closed savings | | | | to someone you trust who can open every item. |
| account. It seemed the bank had sent Nick several | | | | - Similarly, have someone take care of paying any bills |
| letters requesting that the overdrawn account be | | | | or accounts on time on your behalf. |
| cleared. Of course these letters went to his | | | | - Ensure that you provide up to date contact numbers |
| grandfather who was collecting his mail whilst he was | | | | and addresses whilst overseas so that you can be |
| overseas, who duly left the mail unopened. It wasn't | | | | contacted. A working mobile phone with international |
| until Nick started receiving letters from a collection | | | | roaming and an email address you check regularly are |
| agency with a bold "overdue account" emblazoned on | | | | something you should never be without if at all possible. |
| the envelope that his grandfather thought it may be | | | | - Even if you don't plan to borrow any money in the |
| prudent to open the mail before the bailiff came | | | | near future, request a copy of your credit file anyway. |
| knocking. | | | | In Australia this is handled by one main company who I |
| Nick repaid the overdrawn account but by then of | | | | can't promote in this article, but they can provide a free |
| course it was too late. The bank had duly registered | | | | credit report file listing if you don't mind waiting 10 days. |
| the overdue account on Nick's credit file, to remain for | | | | Otherwise you can obtain one within 24 hours for a |
| the next 5 years even if repaid. He did not realise the | | | | fee. |
| implication of this until he applied for finance with his | | | | - Monitor your credit file. Some credit reporting |
| Credit Union. | | | | agencies provide this service for a nominal sum per |
| I could see Nick falling into the depths of despair, faced | | | | year, and provide an email alert each time your credit |
| with a blemish on his credit record that would follow | | | | file is accessed by any institution, or if any additional |
| him around for another 5 years. Being a former bank | | | | information is added. This could potentially save you |
| employee in the bad debt department I offered Nick | | | | from falling victim to Credit Fraud whereby someone |
| my somewhat dated expertise to see if we could do | | | | else attempts to apply for credit in your name. |
| something about clearing up his credit file. | | | | - Invest in a paper shredder and don't let any |
| Since the Credit Union wouldn't even let him look at his | | | | document, credit card receipt, or anything else |
| own credit record, the first step was to obtain a | | | | containing information about you go in your bin without |
| current copy of his credit file to see how bad the | | | | being shredded first. |