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Sorting fact from fiction: Myths about your credit file

Think you understand your credit file? Find out how many of these myths you believed.


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Your credit file is one of the most important financial records you have, as it shows how risky you are as a borrower, and therefore how likely it is that you'll be approved for a loan. While some aspects of your credit file are clear – if you default on a loan it will be listed, if you open an account it will be listed as well – other elements are not quite as easily understood. To help clear things up, we break down some of the most common myths about your credit file in this guide.

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  • Myth 1: You don't need to make a full repayment to have it listed as an "on-time" repayment

Make full repayment

Not all credit accounts are repaid in the same way. Some require multiple repayments a month (such as some short-term loans), some only require you to pay a minimum repayment (such as credit cards) and some require you to pay a specific amount to keep the account in good standing (such as personal loans).

On your credit file, your repayment history notes how many months your repayments are overdue. If you aren't overdue a "0" will be listed, if you are one month overdue a "1" will be listed, and so on. If you do not make the minimum payment, only make a partial payment or do not make every one of your required payments for that month, it will be considered an overdue payment. While one overdue payment will not tip you over into bad credit, too many of these will damage your credit score and will be a red flag to lenders.

  • Myth 2: Paying your electricity bill on time will improve your credit score

pay your bills

Utility providers are not permitted to include information about whether your repayments are on time. This includes electricity, water and gas providers, telecommunications companies such as for your phone or Internet, or public transport or toll providers.

  • Myth 3: Paying your electricity bill late will not affect your credit score

you need to pay bills

While utility providers cannot report on ongoing repayments, they can list a default if you fail to pay at all. If you have a debt that is over $150 and it is over 60 days overdue it can be listed as a default on your credit file. The utility provider will need to send you two separate notices to your last known address to advise you of the default before listing it on your file.

  • Myth 4: A credit provider can list any defaulted payment on your credit file

declaration of bankruptct

A credit provider is unable to give information to a credit reporting body about an overdue payment that it can no longer demand you pay. This is because the credit provider is restricted by the statute of limitations from enforcing the debt.

  • Myth 5: Shopping around for credit doesn't affect my credit score

we're going shopping

Every application you make for credit is listed on your credit file and affects your credit reputation. The more applications you make in a short space of time, the more of a risk you look like to potential lenders. It's important to space out your applications for credit and only apply for credit if you are certain you want to take on the account.

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6 Responses

  1. Default Gravatar
    ShannonNovember 19, 2018

    I have a very good credit rating mid 700s but can’t get a credit card or loan. In saying that I am on a disability support pension. Please help

    • Avatarfinder Customer Care
      JohnNovember 20, 2018Staff

      Hi Shannon,

      Thank you for reaching out to finder.

      Please check this link to see our article on pensioner loans. Kindly review and compare your options on the table displaying the available providers. Once you have chosen a particular provider, you may then click on the “Go to site” button and you will be redirected to the provider’s website where you can proceed with the application or get in touch with their representatives for further inquiries you may have. Before applying, please ensure that you meet all the eligibility criteria and read through the details of the needed requirements as well as the relevant Product Disclosure Statements/Terms and Conditions when comparing your options before making a decision on whether it is right for you. Hope this helps!


  2. Default Gravatar
    RobOctober 9, 2018

    Is there such a thing as a credit ratio in Australia? i.e. If you have $10k credit on a credit card but only using $1,000 then your credit ratio would be 10% and therefore increasing your credit score or is that just an American thing?

    • Avatarfinder Customer Care
      JeniOctober 15, 2018Staff

      Hi Rob,

      Thank you for getting in touch with finder.

      While credit card debt isn’t a great thing to have, it can’t negatively affect your credit score if you make your repayments on time. Your credit card limit is listed on your credit file, but not your balance. In the US, credit card utilisation, or the ratio of your credit card debt to your credit card limit, is one of the five factors that affects how your credit score is calculated, which is why some Australians might think it would be the same here. As your balance isn’t noted, only your credit card limit – among other aspects – can affect your credit score.

      I hope this helps.

      Please feel free to reach out to us if you have any other enquiries.

      Thank you and have a wonderful day!


  3. Default Gravatar
    JeffJuly 7, 2018

    Hi I hope you’re well. I’m a little confused, I just checked my credit rating and it’s in the high end, albeit just. I thought my credit score would be higher since I don’t make late payments and nothing is overdue. My report says nothing is marked against me so why is it only 806 and not 1,000?

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