Frequently Asked Credit Questions,and Credit Answers

Need Help Understanding Your Credit File?

Overdue Accounts (called defaults)

Credit Fraud

About Credit Providers

What is My Credit File?

A credit file is simply a report that records information (credit and identity that is of relevance for credit assessment purposes):

Please click here to view a pdf version of a sample report.

No. Only people who are, or have been, credit active in the last 7 years will have a credit file.

Information about you and your credit history including:

Your credit file is initiated by the credit provider the first time you apply for credit or information that is obtained from public authorities; i.e. Directorships, Proprietorships, Bankruptcy or a Court judgment. The credit provider inputs information directly into the database about you, including your:

Once your initial credit file is set up, subsequent credit providers update your file by adding the relevant credit application details and any change of address information.

Yes, for a number of very good reasons.

You can obtain a copy of your file and a detailed report explaining it in layman's terms plus a health score rating for just $69.95 including GST. This will be emailed to you within (48) hours of your request and payment. Click 'my credit file' to order this now.

Yes. Click here to view a sample report.

The decision to decline your application for credit is made by the credit provider not a credit agency. The first step in identifying why you were refused credit is to look at a copy of your credit file, and the report that comes from this site.

You may discover:

If this is the case, please click on What do I do if the information on my credit file is incorrect or needs to be updated? for advice.

It is also important to understand that a credit provider may decline an application for credit even if overdue accounts, court judgments or bankruptcy information on a file show that they have been paid in full or settled.

Credit providers each have their own lending criteria. They will attach varying degrees of importance to the information provided in the credit file and that which they obtain from you, depending on the amount of risk they wish to take when deciding whether or not to approve credit.

Need Help Understanding Your Credit File?

The amount of time taken to update information on your credit file can vary.

If a credit provider is updating an entry they have placed on your credit file, the maximum delay will be five working days from the time they notify the credit agency of the required update. Depending on the method used by the credit provider, the update may be completed much sooner.

Most credit providers score or rate an application as part of the process to assess the risk involved in providing credit to you.

This technique involves building a score or credit rating based on the information you provide on the application form and the information held on your credit file.

Information supplied by you on your application form to the credit provider may, on its own OR in conjunction with the information that is held on your credit file determine that you did not meet their lending criteria.

Each credit provider applies their own rating or score to each item of information used in the credit decision process, so one credit provider may approve your application whereas another will decline it. All credit providers however follow the "6 'C' Guidelines for credit Assessment"; devised by Nigel Brookson when analysing an application.

It is important that you understand that even when an overdue account or clearout has been brought up to date or paid in full, it will not be removed from your file.

All overdue account listings remain on file for five years from the date of listing. All clearout listings remain on file for seven years. The fact that an account has become overdue, and then been paid becomes part of your credit history.

There are a number of situations that you could wish to rectify:

Overdue Account Details

Overdue Account Disputes

If you have an Overdue Account (Default) that you are currently disputing with a credit provider, complete and return your fully completed File Update Form plus full details of the dispute to the credit agency. The entry can then be marked 'disputed' until the matter is resolved.

Public Record Information

Your file may contain items on the public record such as:

Should any of this information be incorrect, your reputation and therefore your credit worthiness could be at risk.

Correcting or Updating Identity Information/ Inaccurate Details

If there is any information that is incorrect, such as an address or your date of birth, simply contact the credit provider who made the error and ask they update your information with the credit agency. If you believe there are inaccurate details on your credit file, again contact the credit provider and give them the reference number on your credit file so they can investigate the matter for you.

Overdue Accounts (called defaults)

• An Overdue Account (default) is usually a debt of over $100 that has owed for a minimum of 60 days
• Overdue accounts (defaults) may only be listed by a credit provider once steps have been taken to recover the whole, or any part of the amount. The credit provider must have requested the borrower, either in person or in writing, to pay the outstanding amount; i.e. issue an overdue notice. In many cases a letter of this nature will explain that if payment is not made by a certain date, they will list a default on your credit file.
• Once the account is paid, or brought up to date the credit provider is obliged by law to amend the credit file to show that the overdue account has been paid. Overdue Accounts (default) remain listed on the credit file for five years, unless an investigation proves the overdue account was listed in error
• Potential credit providers in general do not look favourably on customers with a history of overdue accounts; defaults.

NB: Even when the overdue account has been brought up to date or paid in full, it will remain on file. All overdue account listings remain on file for five years from the date of listing. The fact that an account has become overdue, and then been paid becomes part of your credit history.

A clearout is defined as a 'confirmed missing debtor'.

(If you change your contact details; i.e. you change a phone number, or address of your place of residence, you should contact your credit providers so they have your new contact details, or they will continue to try and contact you with the old details, not knowing why you are not responding).

If you have an overdue repayment that you bring up to date, the credit provider will update the status of listing to "current". What this means is that although you still have a balance outstanding with them, your payments are now up to date.

Once the account is paid, or brought up to date the credit provider is obliged by law to amend the credit file to show that the overdue account has been paid. Overdue Accounts recorded as a payment default remain listed on the credit file for five years while Clearout listings remain on the file for seven years.

An overdue account is only ever removed early from a credit file if it has been listed in error. If you do wish to dispute an entry on your file, contact the credit provider directly.

Credit Fraud

One of the most common forms of credit fraud is committed by 'stealing' the identity of another individual. Someone obtains your identity details and uses them to obtain credit for themselves, leaving you with the potential liability for this debt, a damaged credit reputation and the inconvenience of amending your credit file.

Credit fraud is a crime. If you believe that information held on your credit file has been caused by another individual fraudulently using your identity details:

When dealing with credit providers keep notes of all the conversations you have, including names, contact number and the time and date you spoke to them. Also ask questions if you are unsure of the process, as each credit provider will have their own processes for handling fraud.

The credit providers will then conduct their own investigations and notify the credit agency of the outcome. The fraudulent information can then be removed from your credit file.

Yes. To reduce the chances of credit fraud happening to you follow these simple rules:

About Credit Providers

No. However, most credit providers considering applications for credit or the supply of goods and services where payment is deferred choose to do so to ensure their decision to approve or decline an application can be justified.

Understanding an applicant's past credit activities, gives credit providers a better assessment of the potential level of risk involved in approving a new application for credit.

No. There is no dollar limit that triggers a credit file check. In fact applications for services such as electricity or mobile phones may even appear as zero; because the amount of the applicant's potential monthly bill is unknown.

No. Credit agencies also sources information on public record including:

This information is downloaded directly from the database of the information holder directly into the Credit agency database.

Under The Privacy Act (federal legislation that governs what information can be held and the length of time it can be held for) credit providers who you have applied to for credit, or goods and services where payment is deferred by a minimum of seven days may access your file; with your consent first.

The Privacy Act also lays down requirements for dispute resolution and the Security of information held. The Office of the Federal Privacy Commissioner also audits credit reporting agencies to ensure compliance with the Act.

No. You will have to give your authority for anyone to access your credit file. This can be done over the phone, by clicking 'I accept/agree' on a website, or by signing a paper consent form.

A credit reporting agency is permitted to hold credit information files on individuals, as long as they record information in accordance with the Federal Privacy Act 1988, particularly section 18E. For further information regarding the permitted contents of credit files you may wish to visit www.privacy.gov.au.

The information contained in a credit file is used in determining a person's credit-worthiness; that is to say Financiers look at a person's credit history and make a judgement as to what the future performance will be like.

It is important for anyone wishing to borrow money to know and understand what is contained in their own credit file; and to monitor it on a regular basis; yearly at least.

To help manage your credit file follow these six guidelines:

GUIDELINE NO 1 - WHAT IS A CREDIT FILE

Files are kept for people and businesses which have been 'credit-active' during the past seven years. This means if you have applied for credit; for example a credit/store card, a loan, even for a mobile phone account; you will have a credit file.

The file includes details of the following:

It also includes information necessary to identify you as a person, as well as information of relevance for credit assessment purposes, including:

No credit provider is allowed to access a consumer credit file without the permission of the individual.

Many consents are given by clicking 'I accept/agree' to the creditors 'Privacy and Consent' form on a web site, or they may be given verbally over the phone.

It is important to realise that in the case of dealing directly with a lender once you give this type of consent your credit file will; in most cases, have an enquiry added to it.

GUIDELINE NO 2 - HOW TO CHECK YOUR CREDIT FILE

The information on your credit file is one of the factors that impacts on your credit-worthiness. Banks, retailers and credit providers use the data, along with the information you provide to them in an application, to determine whether to lend you money or not.

This is why it is crucial for borrowers to keep a regular watch on their credit file. If there are any inaccuracies on a credit file, it may delay your application for credit while those inaccuracies are investigated and corrected.

We therefore recommend that anyone applying for credit checks their credit file at least 7 days prior to making a credit application.

A simple way to obtain a copy of your personal credit file, with a detailed report, not only explaining your file in detail but giving you a rating of it's health, and your credit worthiness; is by applying on-line to www.mycreditfilereport.com.au

The cost is only $69.95 (including GST), for the first time, and $37.95 for each time after that. A copy will be sent by email within (48) hours, or by post within 2 working days of your request being received paid.

You may only request a copy of your own credit history. For security purposes, prior to applying for your credit file report, you will be asked to verify who you say you are.

GUIDELINE NO 3 - WHAT IF YOU ARE DECLINED CREDIT

There are a number of reasons why a credit provider might refuse an application for credit.

A first step is to check your credit file to identify any problems, which might include:

What do I do if the information on my credit file is incorrect or needs to be updated?

There are a number of situations that you may wish to rectify:

Overdue Account Details

Inaccurate Details

You should also be also aware that:

GUIDELINE NO 4 - WHAT TO DO IF YOU HAVE AN OVERDUE ACCOUNT (DEFAULT) ON YOUR FILE

• Where an overdue account showing on your file has been paid but not updated, call the credit provider and request they contact the credit agency to make the correction. Your file will be updated within five days of the credit provider notifying them that the account is paid.
• Where an overdue account is showing that is not yours call the credit provider and give them the applicable reference number so they can investigate. If justified, the credit provider will then inform the credit file company and the incorrect data will be removed.
• In cases where you are disputing an overdue account with a credit provider, full details of the dispute can be forwarded to the credit agency they use. This action allows for the entry on the credit file to be marked 'disputed' until the matter is resolved.
• Sometimes you may have innocently forgotten to pay an account. Some people find themselves in the situation of finding out they have a default on their file from a phone connection that was in their name many years ago, and they have since moved out leaving the co-renters or new tenants with the phone connected. If they do not pay the account and the connection is still in your name; you are still responsible for the payment of the account.
• Many people find themselves short of money, and simply can not afford to pay the account, and then forget about it, and ignore the 'overdue' letters that come. You may be unaware that the creditor has listed a default against you, and when you next apply for a loan you may be declined because of it. The sooner you pay the default and have it listed as paid, the healthier your credit file will be.

GUIDELINE NO 5 - MAINTAINING CREDIT-WORTHINESS

'An ounce of prevention is worth a pound of cure', is an old saying, and is very relevant to your credit worthiness. It is far better to perhaps swallow your pride and get some help before the situation leads to a default on your credit file. Following the suggestions will ease your cash flow crisis, and maintain your credit worthiness.

GUIDELINE NO 6 - HOW TO DEAL WITH IDENTITY FRAUD

Identity Fraud costs the community over $2 billion a year.

In its simplest form, an individual's personal details are "stolen" and used to gain credit - either cash or goods and services.

The upshot is that the individual is left with a potential liability for the debt, a damaged credit reputation and the inconvenience of amending a corrupted credit file.

It is important you: