Why you don’t have a credit file

Credit files aren't financial records that are given to everyone – here's why you may be "credit invisible".

Your credit file is one of your most important financial records and it's often the main thing that will help or hinder your application for credit. However, not everyone will have a credit file. According to the Australian Bureau of Statistics, there were 15,443,150 credit-active Australians in July 2013. These Australians will have engaged with credit providers by enquiring for credit or holding an account, and this activity will have been recorded on their file.

If you have attempted to order your credit file or apply for a credit account and found that your report didn't exist, you may be "credit invisible". Here's what it means and what you can do about it.

• You haven't held a utility account

Utility accounts include phone (landline), gas, electricity and Internet accounts. These accounts are considered credit accounts and so are recorded on your credit file along with your repayment history. If you default on the account it will also be listed on your credit file.

• You have never held a postpaid mobile phone account

If you have only ever held prepaid mobile accounts then these will not be listed on your credit file. Postpaid mobile accounts are ongoing contracts and require the provider (Telstra, Optus, Vodafone and the like) to check your credit file in order for the contract to be approved.

• You haven't made a credit enquiry

Applications for credit, whether or not they're approved, are listed on your credit file and includes all types of credit accounts. The lender will need to check your file to ensure the information on your application is accurate, and when the application is approved the account will be listed on your file.

How can I develop a credit history?

There's no single surefire way of developing your credit history, but there are a few techniques you can consider. Remember to examine your own personal financial situation before choosing the path for you:

• Switch to a postpaid mobile phone. Compare your phone plan options and consider switching to a postpaid phone contract. You may be able to take advantage of more competitive prices for your handset.
• Get a low-cost credit card. There are a number of low-interest credit cards you can consider to build up your credit history, there is also no annual fee credit cards you can opt for. Just ensure you pay back your balance in full each month.
• Apply for a personal overdraft. If you don't want a credit card, a personal overdraft could also be an option to consider. This is a line of credit that is attached to your bank account and allows you to overdraw your balance up to a certain limit.

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