Is using a credit repair company really worth it?

If you've been rejected for credit in the past due to defaults on your Equifax credit report, it may be tempting to seek out one of the many credit repair companies that offer their services across Australia. However, while they may claim that they can get default listings removed from your file, it is often an expensive process - some charge $1,000 or more.

With such a large amount of money on the line, you might be wondering whether it is worth it. Here's what credit repair actually can and can't do.

What credit repair isn't

The first thing you need to know about credit repair companies is the fact that credit repairers cannot remove items on your credit file that are actually correct. If you have defaulted on a debt within the last five years, it will be recorded on your credit file. There are options to sort out any errors, such as contacting your lender directly and negotiating with them, or alternatively getting in touch with Equifax and allowing us to conduct an investigation on your behalf.

What does credit repair mean

Credit repair is a process where information which is incorrect or inaccurate can either be updated or in some cases removed from a credit file. Before this can happen an investigation must take place by the relevant credit provider and the credit reporting body, like Equifax. The investigation can take up to 30 days. You can find out more about this process here.

If you take on the services of a credit repair agency, make sure you check through the terms of the contract very carefully.

If you find a debt that should have aged off the report, are dealing with accounts that aren't yours or even just have the wrong dates, you can get them corrected by contacting a credit reporting agency such as Equifax. Alternatively, if you do decide to take on the services of a credit repair agency, it is vital that you check through the terms of the contract very carefully, to ensure that you are working with a reputable company.

Bad credit will not follow you forever, but it is still important to stay on top of any erroneous entries in your Equifax credit report. Keep up to date by choosing from a range of Equifax subscriptions including a free copy of your credit report. If you spot any errors, there are a number of free services available to consumers - you don't have to rely on a credit repair agency.

Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstance before acting on it, and where appropriate, seek professional advice from a finance professional such as an adviser.​