Australian residents are as mobile as ever, according to the Australian Bureau of Statistics (ABS), but an advocate for accurate credit reporting warns every time your clients move, they run the risk of damaging their credit rating by not tying up loose ends on their accounts.
CEO of MyCRA Credit Rating Repairs, Graham Doessel, says it’s important that consumers have a strategy for making a clean break at each residence to maintain the integrity of their credit rating.
“Time and again we have the situation where clients apply for a home loan and are refused because they have ‘surprise bad credit’, which when we track it back for them is due to the fallout of accounts sent to their previous address.”
As reported last week on Australian Broker, the recent ABS report Still on the Move examines internal migration across Australia between 2006 and 2011 censuses. The report revealed that 41.7% of Australian residents had moved in the five years prior to the August 9 2011 Census night.
Doessel says this is reflected in the volume of moving-related credit issues and these are not always the fault of the consumer.
“For example, we had a client who needed their credit rating repaired because their Energy Provider could not work out that cancellation of their old account and installation at the new address meant that they had actually moved. Their final account was sent to their old address because they had not specifically provided a forwarding address.”
Doessel says there are five things you can tell clients, to help ensure their credit rating remains in check when they move house:
1. Let all your creditors know you will be moving and give them a forwarding address
“Often we have people say they have told their telco or their energy company they are moving, and provided a forwarding address, but mail has still gone amiss and the client has ended up paying for it. If you have specific details of your call, the creditor may be able to bring up the recording and verify your request.”
2. If ending an account with a provider, request a final account
Doessel says that if you need to cancel your account, such as an energy or home phone account when you move, make sure you request a final account for services. There may be incidental charges, or pay out fees as well as days accrued in the new bill period. Pay that notice as soon as possible.
3. Don’t assume your account is finalised until you get it in writing
Once you have paid your final account, request a statement be sent in writing verifying the account is at an end. If you don’t receive that notice, chase it up.
4. Cancel any direct debits
Places such as gyms and childcare centres operate payments via a separate direct debit company. If you have any direct debits set up, you should notify the company of the cancellation and of your forwarding address.
“Don’t assume correspondence with your gym is enough to cancel that account. You will have signed a separate contract with the direct debit company, and you are just as obligated to them if you have missed payments, for whatever reason.”
5. Redirect mail
Despite providing a forwarding address, and despite your attempts to finalise your accounts, there can be instances where a credit provider continues to send mail to your old address.
“Creditors can and do make mistakes and one common mistake is simple computer or human error with billing systems. To prevent their oversight from costing you your good name through bad credit, consider redirecting mail through Australia Post to your new address.”
Doessel says Australians who have moved and have now been lumbered with surprise bad credit need not put up with it for 5 or even 7 years.
“If your Creditor has an incorrect address for you and they have placed a default or Clear-out on your credit file then you should dispute your credit listing and insist your credit file reads accurately.”