Your Credit Report and Credit Score
If you want to understand your financial status, you need to understand your credit report and credit score. A credit report documents a person's current and recent financial history. Several credit and reporting agencies contribute to your report, and this information determines your credit score.
How Are Your Credit Report and Credit Score Used?
If you apply for a loan or credit, lenders check your report to determine your capacity to keep up with payments. For example, a report full of unpaid debts would discourage a lender from offering you further credit.
Lenders sometimes use a credit score in Australia to decide whether to lend you money. The following information from your credit report determines your credit score:
- The amount of money you have borrowed.
- How many credit applications you have made.
- If you have made payments on time.
Credit scores range between zero and 1000 or 1200. A high score means you are less risky to lend money to.
What Is In a Credit Report?
You can expect to find the following details in your credit report:
- Personal Details
- Name
- Address
- Date of birth
- Credit Information (i.e. any existing credit you hold, as well as whether your credit payments are timely):
- Current Loans
- Credit Cards
- Mobile Phone Accounts
- Household Utilities Accounts
- Credit Applications (In the last five years)
- Defaults (Any unpaid credit overdue by 60 days or more)
- Court Judgements or Orders (As well as bankruptcy or debt agreements you have entered into)
It is important to note that when you apply for a copy of your credit report, your current contact details will be updated. Creditors can use this updated info to contact you for unpaid debts.
How Long Do Details Remain On My Report?
We have constructed this table to help you understand how long certain details will be available on your credit report:
| Detail | Definition | Time On Credit Report |
| Hardship | A declaration that you are temporarily unable to meet your repayment obligations and require assistance. | One Year |
| Defaults | A declaration that you are failing to meet your financial obligations. | Five Years (From when it was listed on your credit report) |
| Clearouts | A serious credit infringement in which your lender has made reasonable efforts to contact you, but is unable to do so for 60 days since the due date. | Seven Years (From when it was listed on your report) |
| Current Loans | Outstanding loans that you are in the process of paying. | Two years (From when your loan ends) |
| Repayment History Information | Information about whether you've met your credit obligations in a particular month. | Two Years (From the date your monthly payment was due and payable) |
| Court Judgements | The decision by a court that you owe debt to a judgement creditor. | Five Years (From the date of judgement) |
| Part IX Debt Agreements | A legally binding agreement between you and your creditors. | Five Years (From the date you entered the debt agreement)
OR Two Years (From when the debt agreement was terminated or declared void, or when it was completed - whichever is the longer time period) |
| Bankruptcy | A declaration that you are unable to pay your debts, and would like to use assets to relieve your debt instead. | Five Years (From the date you became bankrupt)
OR Two Years (From when the bankruptcy ends - whichever is the longer time period) |
Who Can See or Add To My Report?
It is important to know who can and cannot access your credit report. For example, real estate agents and employers do not have access to your credit report.
However, credit providers that you either hold or apply for can access your credit report, as long as they offer at least a seven day credit facility.
When Can I Request a Copy Of My Report?
You can request a copy of your credit report every three months.
When you apply for a copy of your credit report it will also update your contact details. This means that creditors might start to contact you in relation to old debts. If you have experienced family violence and need to ensure your place of residence is kept confidential for safety reasons, please seek advice from a financial counsellor before applying for your credit file.
A reporting agency isrequired to provide your free report within ten days of a request. If you apply online, you will often receive a copy of your report within a few days.
It’s important to note that there is more than one credit reporting agency in Australia, so to get a clear picture of your credit history and accounts it is important to apply for a copy from each agency (see list below).
What Should I Check On My Report?
When you receive your credit report, it is important that you check that details are accurate and complete. Make sure that records for defaults and unpaid bills are correct, and nobody else's transactions are present (because errors do occur).
If there is a mistake, you have the right to contact the credit reporting agency or the creditor (or both) and request a correction. For example, an unpaid loan default may have been eventually paid off but not updated as ‘Paid’ on the credit report.
If you notice something is incorrect on your credit report, you can follow these steps to fix your credit report. Please note: there are organisations that charge money to fix your credit report when it is something you can do yourself, for free.
How Can I Maintain a Healthy Credit Report?
Follow these steps to ensure that your credit remains healthy:
- Pay bills when they are due.
- Keep up with loan and finance repayments.
- Avoid making lots of credit applications.
- Check for any mistakes in your report and act to have them corrected.
- If you have been impacted by family violence you may be able to have credit listings removed from your credit report. See a free financial counsellor for assistance.
Where Can I Apply For My Report?
If you are looking to apply for your credit report, we would recommend either:
- Experian (recently acquired Illion Credit Reporting) apply for your credit report here
- Equifax apply for your credit report here
Can Better Place Australia Help Me Understand My Credit?
Yes. Better Place Australia Free Financial Counselling and Mediation Services are available to people who have money troubles, such as uncertainties surrounding their credit. If you live in one of the many government funded areas across Victoria, you can take the first step by enquiring online or requesting an appointment.
You can also read real stories about people with financial troubles and how Better Place Australia financial counsellors mediated for them.
