With Cairns as one of Queensland’s main areas for people facing financial trouble, there is a new solution that may help many barred from mainstream financial lenders get their names off the credit blacklist.
I read in the most recent Australian Financial Security Authority (AFSA) report that Cairns residents are almost two times more likely to declare bankruptcy than someone in inner city Brisbane, and the high number of people without jobs has contributed to a massive credit crunch in the region.
One in five people in Cairns have been banned from borrowing with mainstream financial lenders because they’ve been late, or haven’t paid bills from mobile phone companies, utilities or credit providers.
There are a growing number of cash-strapped locals getting themselves into financial trouble. So for these people we created a new DIY app, Credit Reboot, which helps people get off the financial blacklist by cleaning up their credit report.
When you can’t use the traditional sources of borrowing to set up a phone account or open a gas connection on your new home, for example, it can lead to all sorts of problems.
The majority of these credit problems stem from an unpaid mobile phone bill – the Telcos are brutal.
Like if you’re more than 60 days late paying a telephone bill that’s more than $150, you can be blacklisted from getting traditional credit. Most people don’t even realise what’s going on – they only find out when they next try to apply for a credit card or set up a new utility account.
They are turned away, and a couple of unwise decisions later – like resorting to payday loans – things can quickly spiral into a vicious cycle of more debt.
Here are some of the common reasons I have found about why so many Cairns residents are on the credit blacklist:
- Telco bill: This is the main area where locals get into strife and the big players are the worst. If they want to play hardball they can mark your credit file if you’re more over 60 days late on a payment of $150 or more.
- Credit cards: A credit card or personal loan payment made more than 14 days late can mean your credit rating is downgraded; after 60 days you can get a default which stays on your file for five years.
- Utilities: Late payments for utility bills such as gas or electricity can affect your credit score if you’re 60 days or more overdue on payment.
The AFSA report shows that the number of people who went bankrupt rose 11 per cent across the country last quarter. About 2500 of those came from resource reliant Queensland – more than any other state or territory. The situation is compounded in Cairns because there so many young people out of work.
The youth unemployment rate is now at 26.6 per cent and the city’s overall unemployment rate has risen from 7.9 per cent to 8.6 per cent in the last 12 months – equating to an extra 1000 people unable to find jobs.
Credit Reboot is a DIY app which takes users through a series of questions to identify where the faults are; it then runs a search through the Credit Reporting Code to identify where the credit provider has made errors in marking the consumers’ credit file. Documents are then electronically prepared and sent off to credit providers to repair their credit file.
If you want more information on Credit Reboot or to download the app, visit www.creditreboot.com.au