If you have ever taken out or applied for credit, you will have a ‘credit file’ in your name.
Your credit file contains a history of your credit applications, default listings and other information from the last (up to) 7 years, and is collated by the major credit reporting agencies if you have been credit-active in the past 5 to 7 years. If you’ve ever applied for finance, or an account for services you are considered credit active and Creditors will have created or added to an existing file with one or more of the credit reporting agencies. Account types include mobile phone plans, accounts with utility companies, credit cards and finance or loans of any kind.
Why should I know what’s on my credit file?
Every creditor collects information about your credit activity and that information is supplied to one or more of the credit reporting agencies in Australia when required. When a lender is considering your credit application they will check your credit file to assess your suitability to repay a loan or credit account.
Your credit file contains your personal information as well as details about credit and repayment of credit, including any applications for credit.
Please note: various details relating to your repayment history on licenced credit accounts – for instance mortgages, personal loans and credit cards – and the way you conducted those accounts are being recorded as of December 2012 – including if you pay those accounts late. This information will be available on to lenders from March 2014 and will be held on record for 2 years.
Your credit file also contains any credit accounts in default – these may be reported as a ‘payment default’, ‘clearout, or in some cases may have gone all the way to a court Writ or court Judgment.
Whilst there are legislative processes which must be followed when Creditors enter items on your credit file, it is up to us as the consumer to check that this has been done accurately. You may not know about a listing on your credit file, particularly if you have moved. In addition to this, mistakes can and do happen – even if you believe you have always made payments on time.
A default or Clearout will generally see you refused most types of mainstream credit for the term of the listing which can be 5-7 years – so it is important to know you have the all clear on your credit file, and if you don’t, you have time to fix any issues prior to applying for credit of any kind.
How do I check my credit rating?
If you are like many Australians you may be unaware of how the system works, and what your rights are in credit reporting so you probably haven’t checked your credit file before now. You’re not alone. A recent study by Veda Advantage shows that 80% of people have never checked their credit file.
You can apply for a copy of your credit file for free every year from Australia’s credit reporting agencies, Veda Advantage, Dun & Bradstreet, and Tasmanian Collection Services (if in Tasmania). A copy will be sent within 10 working days. Or you can pay extra with them for an urgent report.
If your report comes back with errors, or you feel a listing is unjust or shouldn’t be there, you do have the right to have incorrect information rectified.