If you have ever applied for a loan or credit product, there will most likely be a credit file about you that credit providers use while assessing your applications for credit.
Your credit file contains all the information lenders need to assess your ability to repay credit. Each time you fill out the paperwork for any loan, mortgage or even utility application, an enquiry is added to your credit report. Loan defaults, missed utility payments and other overdue debts can be added to your credit history, ruining your credit reputation and making lenders deny you credit. Therefore, it is important to check how your credit file looks to lenders by ordering a copy from credit report agencies such as Veda or Dun & Bradstreet. This can give you a chance to rectify mistakes on your report so that your credit file looks attractive to banks, building societies and other lenders.
What is a credit file?
A credit file is a collection of your credit reports obtained from credit card providers, banks, mortgage providers and utility service providers. The financial information in your file is used to assess your ability to repay debt in time, enabling lenders to avoid the risk of giving credit to known defaulters or people with bankruptcy or insolvency issues. Each time you miss a payment on your car loan, mortgage or utility bill, that information is added to your credit enquiry, affecting your credit score negatively.
In Australia today, your credit file will contain more financial information than in previous years. Your loan repayment history, including the date your credit repayments were due, missed payments and even missed utility payments will appear on your credit history. Businesses and lenders alike check out this information so as to reduce the risk of incurring bad debts.
Order a copy of your credit file
Receive email alerts whenever specific changes occur on your credit file for 12 months. You also receive a copy of your credit file despatched within one working day.
Receive your credit file with information on:
- Details of consumer credit enquiries
- Details of overdue consumer credit accounts
- Commercial credit enquiries
- Details of overdue commercial credit accounts
- Bankruptcy & Court Judgements
- Writs & Summons
- Information on your current relationship with a credit provider
- $79.95 p.a. annual fee
What information is held on my credit file?
Your credit file contains all your financial information, including repayment history, current debt, commercial and personal loans applied for and other details to help lenders assess risk when giving you credit. Here are the details contained in a credit report:
- Personal information. This includes your name and date of birth, current address, current employer, driver’s license and gender.
- Default notes. This is information on any overdue debts, missed payment on loans and utility bills and other serious credit infringements.
- Public record. This section will contain any information that is held in public record including bankruptcy notes, court writs and judgments, personal insolvency agreements and directorship or proprietorship information.
- Credit information. This includes information on any applied personal and commercial loans, mortgages, credit cards applied for including the name of the credit provider, previous credit card applications and credit enquiries.
- Joint applicants Any loans or credit cards that you have jointly applied for from any lender will be listed in your credit report.
How long are negative listings held on my file?
- Clearouts (7 years). Information about a clearout will remain on your credit file for seven years even after you settle the debt, and it may lead to you being denied credit by other lenders in the future. The credit provider has to prove that they tried to contact you about your overdue debt but were unsuccessful due to your unknown whereabouts.
- Bankruptcy information (up to 5 years). Bankruptcy information will remain on your credit file after entering insolvency, or two years after the insolvency has finished (whichever is the longer period).
- Payment defaults (5 years). Any unpaid utility bills, loans or credit card payment that stays unpaid for a period of 60 days or more is listed on your credit history as a payment default, and remains in your file for 5 years. If you repay your debt, the credit default listing will remain on your file but the report can be updated to show you settled the debt.
- Credit enquiries (5 years). Each time you apply for credit, an enquiry is added to your file by the credit provider i.e. utility company, credit card provider or mortgage provider. Many credit enquiries over a short span of time look bad to credit providers and may lead to your credit application being turned down.
- Court judgement (5 years).
- Summons or writ (4 years).
- Current payment status. Debts that you owe but are not yet overdue will be listed as current on your credit report.
How do I get a copy?
You can keep track of your credit standings by obtaining a copy of your credit file from main credit report agencies in Australia. Knowing how your credit report looks to lenders can be a starting point to improving your credit reputation and obtaining more credit from lenders. You do have a right to know how your credit file looks and whether the information on it is a fair reflection of your ability to repay debt.
Credit report agencies such as Veda, Dun & Bradstreet or Experian keep updated credit files of anyone who has ever had a line of credit, and can send a copy of the file to you either online or via Australian post. For urgent deliveries of your credit file, you may be required to pay a fee, but you can get the file for free within ten working days.
Why is it important to check my credit history?
Out of date or inaccurate information on your credit file can cost you a whole lot when applying for a credit, which is why you should do an yearly check to ensure it is accurate. Erroneous defaults or outdated information about overdue accounts can deter credit providers from giving you credit. Here are the main reasons for checking your credit file regularly:
- Incorrect personal information. Details such as incorrect addresses or date of birth can also cause you problems when applying for new loans.
- Checking for incorrect defaults. Sometimes, credit reporting agencies might list a default incorrectly into your file. The default could be listed twice affecting your credit standing, or an overdue account that is not yours could be included in your file. If you discover an erroneous default, you can correct it in time and improve your credit standings.
How can I deal with incorrect listings?
Incorrect listings can include wrong personal information such as your name, address, current employer or defaults that are listed twice in your file. Mistakes in the amount defaulted, or incorrectly listed defaults that were made while you were already paying the debt or negotiating terms of payment can all be corrected. Credit report agencies are specialists in helping you manage your credit information by rectifying such mistakes or updating outdated financial information that could be affecting your credit score.
Mistakes by credit report agencies such as incorrect personal information can be corrected by contacting the agency and requesting for a revision. Mistakes made by credit providers such as incorrectly listed defaults or inflated default amounts can be resolved by contacting the lender and disputing the listing.
Frequently asked questions
- Can paying my bills late affect my credit file? Yes it can. Unpaid electricity or phone bills that are overdue can be listed as defaults after 60 days, though the credit provider has to inform you of the overdue bill before adding an enquiry to your credit report.
- Can being refused credit impact my credit file? Unfortunately, lenders look at any refused credit applications as a negative indication on your credit obligations. Closed accounts, repeated credit inquiries and your credit repayment history all play a part when lenders are assessing your creditworthiness.
- Under what circumstances can you obtain a free copy of your credit file? You can get your credit file from a credit reporting agency every 12 months or when you are denied customer credit i.e. a loan or credit card in the preceding 90 days.