Your credit file guide
Want to be in a better position the next time you apply for credit? Find out everything you need to know about your credit file.
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Your credit file contains information lenders and other providers use to assess you when you apply for certain products and services. Your credit file contains a variety of information including personal details, credit accounts you have applied for, accounts you have defaulted on and more. It's important to understand each part of your credit file so that the next time you apply for credit you are in the best possible position to be approved. The guide below will take you through what you need to know.
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What is a credit file?
A credit file is a collection of information obtained from credit card providers, banks, mortgage providers and utility service providers. The financial information in your file is used by lenders to assess your ability to repay debt and manage loans. Lenders and service providers look at credit files to avoid the risk of giving credit to people who are known to default on payments and those with bankruptcy or insolvency issues. When these details are listed on a person's credit file, they may decline an application of, if they offer credit to those borrowers, they may have stricter requirements or higher rates and fees.
What information is in my credit report?
Your credit file contains your financial information, including repayment history, current debt, commercial and personal loans you have applied for and other details that help lenders assess your ability to responsibly manage credit. Here are the details contained in a credit report:
- Personal information. Your name and date of birth, your current address, where you work, your driver’s license details and your gender are listed in your credit file.
- Default notes. This is information on any overdue debts you might have, payments you've missed on loans and utility bills and other serious credit infringements.
- Information that is public record. This section will contain any information that is held in the public record including bankruptcy notes, court writs and judgments, personal insolvency agreements and directorship or proprietorship information.
- Consumer credit information. This includes credit applications you've made in the last five years (whether they were approved or not), the type of those credit accounts, such as credit card or personal loans, account open and close dates, the credit limit of the accounts, your monthly repayment history on credit accounts and details on overdue accounts.
- Commercial credit information. Details of credit enquiries you may have made for commercial purposes and overdue commercial credit accounts are included in this section.
- Joint applicants. If you've applied for any loans or credit cards as a joint borrower this will be listed on your report.
How do repayments affect my credit report?
When lenders access your credit file they want to ensure the information you supplied in your application is accurate and that you will be able to manage the debt you are applying for. If you consistently make late repayments it can indicate that you can't manage the debt you have, while making repayments on time can indicate to a lender that you're a responsible borrower.
If you have a default listed on your file you can also keep making your repayments on time to help build up a positive credit record. Ultimately, repayment history is just another part of the risk assessment that lenders undertake when assessing your ability to manage your debts.
What about payment plans and instalments?
If you are making payments to a buy now, pay later service, details of the account may be listed when you apply and if you default on your repayments. It does depend on the service though. For example, Afterpay does not typically check your credit report or provide details to credit-reporting bureaus, while zipPay and zipMoney do. To learn more, check out Finder's guide to interest-free payments and your credit score.
If you have set up an instalment plan on a credit card or another credit account that offers this option, the details will typically be reported in the same way as monthly repayments.
If you want to stay on top of the listings on your credit report, you can receive notifications every time something changes on your file thanks to the credit monitoring service offered when you get your credit report and score through Finder.
How long is information held on my file?
Following the introduction of comprehensive credit reporting, both positive and negative listings are recorded by credit providers. However, it is the negative listings such as bankruptcies and overdue accounts that will be listed on your file for longer and impact your ability to access credit. Use the following as a guide for how long listings will appear on your file:
|Type of listing||Number of years it's listed||Description|
|Payment history information||2||Monthly repayment history information on active credit accounts.|
|Credit enquiries||5||Applications made to utility companies, banks or lenders for services or credit products (whether approved or not).|
|Overdue accounts listed as a payment default||5||Overdue accounts of $150 or more that is 60 days or more overdue.|
|Writs and summons||5||An invitation to appear in court to settle a debt. A writ is similar to a summons but is for a higher court.|
|Court judgements||5||Once you've been through the court process the court judgement will remain on your credit file for 5 years.|
|Bankruptcy information||5||If you enter into bankruptcy it will be removed from your file two years from the date you're discharged or five years from the date you became bankrupt, whichever is later.|
|Overdue accounts listed as a clearout or serious credit infringement||5-7||Overdue accounts in default where the credit provider hasn't been able to contact you for 6 months. Can be listed for 7 years from the time they're listed but drop back to 5 years as a default listing once it's paid.|
How do I get a copy of my credit report?
You can get a free copy of your credit report, provided by Experian, through Finder. You can also check your credit score. You'll have access to your report and score whenever you want to check it through your Finder account. You can also get notifications when something changes on your report.
What should I check in my credit file?
When you order your credit file you should go through the following details:
- Personal information. Ensure all of your personal details are correct. This is to limit the chance of identity theft or being rejected for credit because of a misspelt first name.
- Account details. Check that all your current credit accounts are listed correctly, including details about your credit limits and repayments when applicable. If some of this information does not look correct, see below for details of how to get it updated.
- Incorrect defaults. Credit reporting agencies or lenders might list a default incorrectly into your file. A default could be listed twice or you could have a default listed for an account you paid on time. If you find an incorrect default talk to the credit reporting bureau first, then if that doesn't rectify it you should contact the credit provider. A full process for dealing with incorrect listings is outlined below.
How can I deal with incorrect listings?
- Contact the credit reporting bureau first. It may be able to remove it or contact the credit provider on your behalf to have it removed. If not;
- Contact the credit provider that listed it and explain why the listing is incorrect. The credit provider should have a dispute resolution team or process in place. You can also contact the Financial Ombudsmen Service or the Credit and Investments Ombudsmen. If that doesn't rectify it;
- Contact the Privacy Commissioner. This should be the last stop if the provider's dispute resolution scheme fails to rectify the issue. You only have 12 months from the date you became aware of the issue to file a complaint.
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