The financial services regulator of Australia has issued a warning to consumers to be careful of companies that are touting that they could fix poor credit scores.

ASIC is overseeing a drive to help Australians comprehend that credit repair and debt management companies can actually charge exorbitant fees. And that’s not even the worst part: they sometimes give nothing in exchange for the said fees.

According to the ASIC, these firms “often fail to fix credit and debt issues, which can leave people in a worse financial situation.”

Peter Kell, the ASIC deputy chair, remarked that instead of turning to such companies, there are free services, such as the National Debt Helpline, that can help Australians fix credit reports or tackle their debt issues.

“Consumers experiencing money or debt problems don’t need to put themselves under further financial stress by paying high fees to firms providing credit repair and debt solution services,” said Kell.

“If people are having difficulty obtaining loans because of an incorrect default listing on their credit report, there are actions they can take that are free of charge to have it corrected. If you think you have had a credit default wrongly listed against you, contact the creditor and ask for it to be removed. If you aren’t satisfied with the response, you receive you can contact the relevant dispute resolution service for help,” he added.

Kell said consumers should take a close look at alternative services, such as financial counselling, before turning to a debt solutions company for solutions to their problems.

If you are having trouble managing your finances (and these days, who isn’t?), perhaps tapping the help of a professional would help. Find out what exactly a financial planner can do for you.

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