Check Credit File Facts

The Credit Information contained in a Credit File is used in determining Your Credit Rating; that is to say Financiers Check 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:

  • Understand what a credit file is
  • Check Credit File - You should check before applying for credit / Loan
  • What to do if you are declined credit or have Credit Problems
  • What to do if you have an overdue account or Credit Defaults
  • Maintain Your Credit Rating
  • Handle identity fraud as soon as you are aware of something wrong

What is My 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:

  • when credit was applied for
  • in whose name it was sought
  • from what business or institution
  • the amount of credit sought and;
  • the type and purpose of the credit sought.

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

  • Personal details (name, address, sex, date of birth, drivers licence number)
  • Any overdue accounts or Credit Defaults (payments over 60 days in arrears)
  • bankruptcy details; including discharged date
  • court judgements
  • details of directorships or proprietorships.

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.

How to Check Credit, Your Credit Rating & 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 detailed Credit Reports, not only explaining your Credit File in detail but giving you a rating of it's health, and Your Credit Rating; is by applying for a Credit Report Online.

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.

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:

  • An overdue account(s), called Credit Defaults; which means your account is at least 60 days in arrears
  • Incorrect information on the file; which may include wrong spelling of your name or address details
  • Someone is using your identity to illegally obtain credit, pretending to be you, and has defaulted on the
    payments.

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:
  • If you have an Overdue Account (Credit Defaults) on your file that has been paid but has not been updated; i.e. in the status row it does not say paid, you should contact the credit provider listed and ask them to update your credit file showing the account has been paid. Your file will be updated within five 5 days of the credit provider notifying the credit agency that the account is paid
  • Should you discover an Overdue Account (Credit Defaults) on your file which is not yours (you may not recall having an account with that company) immediately contact the credit provider and give them the reference number on your credit file so they can investigate the matter for you. If the credit provider confirms that the account is not yours, they will inform the credit agency so that it can be removed from your file completely.
Inaccurate Details:
  • If you believe there are inaccurate details on your file, you should immediately contact the credit provider and give them the reference number on your credit file so they can investigate the matter for you.
You should also be also aware that:
  • Credit providers have their own individual criteria for deciding who to lend their money to
  • Refusal may occur even if overdue accounts, court judgements or bankruptcy information on a file shows that they have been paid in full or settled.

What to do if you have overdue accounts (Credit Defaults) 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.

Maintaining Your Credit Rating

'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.

  • Pay your bills on time; i.e. before the due date
  • Call your credit provider(s) as soon as you are aware there is a problem in meeting your commitments; this can stop a direct debit dishonour fee from occurring. Many credit providers are sympathetic to this type of request and given at least 7 days notice, they can make a note on your account.
  • Review your credit file yearly to make sure there are no errors in the information and/or discover any overdue accounts that have been forgotten about.
  • Check your credit file to ensure someone is not fraudulently using your identity (a growing problem in Australia and indeed worldwide)
  • A "decline" to a credit application, does not necessarily mean your credit file is 'flawed'. Credit providers each have their own lending criteria, so make sure you understand why you were declined, this may allow you to rectify the problem before applying again or with another credit provider.
  • Remember that the details of overdue accounts listed as a payment default, even when paid; remain on your file for five years from the date of listing, as part of your credit history.
  • Overdue accounts where the debtor has been 'confirmed missing' remain on the database for seven years.
  • If next to status is the word settled; you have entered into an arrangement with the credit provider or collection agency to 'settle' the account but for a lesser amount than what was owed; i.e. you made a lump sum payment of say 80% of the debt. Future creditors will know that the account was not 'paid in full'

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:

  • Know what is on your credit file
  • Check your credit file at least yearly
  • Keep store/credit cards and personal ID items in a secure place
  • Completely destroy any paperwork that contains your personal details or account details; such as old Bank statements (it is good practice to always keep statements for at least the last financial year) before throwing away, but keep them in a secure place that you can access them when required
  • Contact your credit provider/financial institution as soon as you realise you have lost or had stolen any cards
  • Keep your Personal Identification Number(s) confidential and separate from your card
  • Don't disclose your Personal Identification Number(s) to anyone
  • Contact the Police, then your credit provider(s) if you discover information on your credit file has been caused by another individual fraudulently using your identity details. Always keep notes of all your conversations with these departments, including names, dates and contact numbers.