Five million Australians are being put on credit rating blacklists through no fault of their own.
But there are easy steps you can take to avoid being one of them.
Here's a question for you. How long's it been since you've checked your credit report? If the answer is years, you're long overdue.More stories from Today Tonight
Even if you think you have a clean record you can end up with a default, blacklisted over someone else's mistake.
The victims of credit defaults are blacklisted through no fault of their own, and one simple clerical error on your credit file can place your life and your financial position in limbo.
Jodie Anderson applied for a car loan and got knocked back. She was shocked to find she owed money to a photography business she'd never heard of, in a state she'd never been to. Turns out she'd been confused with another Jodie Anderson.
“To get rejected was shocking because I'd never done anything wrong.”
After Jodie’s dramas her mother, Jill Armstrong checked her credit history. She was also known as someone else.
“They could have any number of defaults or summonses, which then reflect back on me because I'm known as both people to (credit agency) Veda,” Jill said.
Credit agency Veda Advantage fixed both files promptly, but until then all the duo could do was wait and hope.
According to My CRA's Graham Doessel “you can pay your bills on time and have a clean record and still be defaulted by mistake. It can be both financially and emotionally crippling.”
Craig Warrington was told he'd lose the family home if he didn't pay a bill he'd already paid.
“This company told Veda Advantage that they were owed money, so Veda just defaulted us.”
To clear his name he hired a solicitor, and paid the $6000 bill twice
Chris Gration from Veda Advantage says with 14.5 million credit files on their books, and 16,000 transactions a day, mistakes can happen and quite often its human error. But they’re not the only ones to blame.
“Sometimes consumers put their details on an application form either incorrectly or different to the way they did last time. Sometimes a bank clerk, when they type information in, will get a keying error. Sometimes a program we're using to try to detect errors will actually not detect it, or correct it wrongly,” Gration explained.
The worst offenders are telcos, energy companies are a close second, followed by councils.
Troy Cornick was placed on financial hold by Telstra for over a year. A default hindered him from being able to refinance. Calling Telstra wouldn't help either, even after the thirteenth time.
“Every couple of days I've spoken to Telstra on the phone. I end up hanging up swearing at the phone - they must think I’m going nuts,” Cornick said.
Cornick finally went to the Telecommunications Ombudsman and Telstra admitted they were at fault, removing the debt from his account, but not the notation against his credit history.
If you do find an error or a default Doessel advises contacting the creditor first, and if that doesn't help try the Telecommunications Ombudsman, or otherwise a credit repairer like MY CRA, who can sort out whether the problem is a legitimate default or not.
But the biggest tip is to check your credit history annually.Contact details