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are right for you:

  • You're an Australian resident
  • You're between 18-65 years old
  • You or your partner have a regular income
  • You may need to borrow money or take control of your debt
  • You may have been declined for a loan or have trouble paying your debt

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  • We'll work with you fully understand your financial situation
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  • If you're applying for credit restoration improvement, we cannot guarantee that all adverse credit notations are removed from your credit report
  • We can only use our best endeavours to ensure that your credit record is true and correct
  • We will not provide you with any Insolvency services unless and until we've advised you that you may obtain help, free of charge, with credit and debt related problems from community based financial counsellors.

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What’s new? 

New information relating to financial hardship will come in effect from July 2022. An update to the law will change how repayment history information is recorded in a credit report when a borrower and their lender agree to a “financial hardship arrangement”.

Previously, your credit report might have shown you had missed repayments during the arrangement – without making it clear that this was due to financial hardship and done with the agreement of the lender.

What is a financial hardship agreement? 

A financial hardship arrangement is an agreement between a borrower and a lender to adjust the borrower’s loan repayments because something unexpected has happened which has a big impact on your ability to repay. Payment deferrals caused by natural disasters are good examples of when this might happen, but other circumstances such as illness or relationship breakdown might also lead to such an outcome.

The changes to the law will mean:

 

  • The repayment history information on your credit report will reflect what was agreed under the financial hardship arrangement. For example, if the lender agrees for you to temporarily make half your normal repayments, your credit report will show that the payment has been made if you meet that agreement.
  • The credit report will also put a “flag” alongside your repayment history information that means that the repayment history is associated with a special arrangement – in the credit report this will be referred to as “financial hardship information”.

 

This means that if you need financial hardship assistance you can avoid having your repayment history impacted. At the same time, if you were to apply for a new loan with a different lender, they would understand you had received assistance and in order to be a responsible lender would likely want to discuss your up-to-date circumstances before agreeing to lend.

How else do the changes protect you?

The changes to the law include extra protections for you, including:

 

  • Limiting the circumstances in which other lenders can be told about your financial hardship arrangement – so other lenders can be told if you apply for another loan with them, but not if they are trying to collect overdue payments on existing loans
  • Limiting what a lender can do with your financial hardship information when they do find out e.g. a lender can’t use the information as the sole basis for closing down a credit card
  • Deleting the financial hardship information from your credit report after 12 months (compared to 24 months for regular repayment history information) so that a temporary setback doesn’t have a lasting impact on your credit report

 

Prohibiting a credit reporting body (which holds credit reports) from including any financial hardship information when calculating your credit score

 

 

Disclaimer: This article is for general knowledge and may not reflect your individual situation or requirements. You should seek your own advice. Finance approval will be subject to individual lenders credit criteria.

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