Credit Simple launches Clear Name, a way for people to clear outstanding defaults at a discount
Today we announced we’re launching Clear Name, a sister business to Credit Simple, that’s going to give Kiwis a way to clear outstanding defaults at a discount. Clear Name is a New Zealand first, and it’s designed to give people a chance to pay off unpaid defaults online and at their own discretion.
We reckon Kiwis deserve the best shot at living a healthy financial life, so we’re calling on all credit providers to sign up to Clear Name so more people can benefit from this service.
CreditSimple.co.nz CEO David Scognamiglio said Clear Name was designed to give people the tools to manage their unpaid defaults themselves. A default happens when a payment to a credit account is at least 30 days overdue and is more than $100*.
“It takes just one missed payment to affect your credit score, which means it may be harder to get credit in the future – and that’s often just when you need it most,” Mr Scognamiglio said. “Having unpaid debt can create huge stress for people, so we built Clear Name to help consumers manage their debt position, and pay their defaults in a private and hassle-free way.
“We believe Clear Name changes the way consumers pay defaults, by giving the control back to consumers, empowering them with access to a discount and to clear their unpaid defaults once and for all.”
Once credit providers are on board to offer consumers discounts on their outstanding defaults, people will be able to use Clear Name through the Credit Simple site. Using Clear Name and Credit Simple is completely free, with no obligation at any time. Even if consumers are not in a position to pay off the outstanding default immediately, they can go online, check their Clear Name position, find out what they owe, and see the potential discount, without any obligation to carry through with a payment.
Credit Simple CEO David Scognamiglio said Clear Name is calling on credit providers to sign up to the service and help Aussies live their best financial life.
“We know that people are more likely to pay an outstanding default if they feel like they’re in control of the process, including how much they pay and when the payments happen,” Mr Scognamiglio said.
CreditSimple.co.nz analysis** shows that the largest percentage of defaults belong to the 25-34 age (32.8%), followed by those aged 18-24 (22%), then the 35-44 age group (20.1%).
Relative to population size, 18-24 year olds are the most likely to have a default (22% of defaults from 6.5% of the credit active adult population), especially a telco default, compared to utilities, loans and credit cards. Likelihood decreases consistently with age.
Females are more likely than males to have a utility default, while males are more likely to have a credit card default. Young people aged 25-34 are the least likely to pay off a default, showing the lowest paid-up rate, while age groups 45 and over tend to have the highest paid rates. Men have a higher percentage of paid defaults (13.3% compared to 10.3%), while women have a higher percentage of part-paid defaults (10% compared to 8.8%).
Facing up to the debt as soon as you know you have it is the best way to go, Mr Scognamiglio said. “It’s easy to stick your head in the sand when you can’t pay a bill, or if you’ve forgotten about it and suddenly had a sharp reminder. But leaving all those envelopes unopened or sneaking around to avoid the debt collector isn’t going to make your money problems go away. Leaving it just makes the situation worse. The only way for things to get better is to take action.
“Having an outstanding debt is actually one of the most easily resolved black marks you can have on your credit file, but leaving it there looks really bad when you’re asking companies for credit. It’s best to clean up any unpaid bills straight away.”
*A default is information about a payment to a credit account that is at least 30 days overdue, where the credit provider has notified the individual in writing about the overdue payment and the overdue payment is equal to or over $100. A default remains on your credit report for five years from the date of default.
**Drawn from data held by illion, CreditSimple.co.nz’s parent company.
Credit Simple gives all Kiwis free access to their credit score, as well as their detailed credit report. See how your credit score compares by age, gender and community and gain valuable insights into what it all means.All stories by: Credit Simple