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Your credit report has important information about your financial history. Find out more about your report and how it will impact your app.

What’s on your credit report

Your credit report has a range of information all related to your credit history. Credit reporting agencies collect data from credit providers, courts and other similar companies and compile it together in one simple report. The information you will find on your credit report include:

  • Personal information: Name, date of birth, address (both current and past), driver’s licence number and employment details.
  • Joint applicants: If you have applied for credit with another person, their name will also appear on your report.
  • Credit cards: If you have any credit cards, this information will be recorded.
  • Credit enquiries: This includes any credit you have applied for, no matter whether you went ahead with the lender or not. It also includes any loans you have been a guarantor for. All enquiries in the past 5 years will be on your credit report.
  • Repayment history: Home loan, personal loans and credit card repayment history may be shown if the credit provider reports this information. It will include repayment information for the past 2 years on:-
    • The date repayments were due
    • Whether repayments were made by the due date
    • The dates you made any missed repayments

Did You Know?

If you sign a contract with a utility provider, it may result in a credit enquiry on your credit report. Unlike loans, these will not show repayment history information. Utilities include:-

  • Electricity, water and gas
  • Phone accounts for your home phone, mobile and internet
  • Arrears that have been paid: Unpaid or overdue debt that has now been paid.

  • Defaults: Defaults are repayments or other bills that are 60 days or more overdue. The credit provider sends this information to the credit reporting agency to note a default on your credit report.

  • Debt agreements: This includes any bankruptcies, court judgements, debt agreements or personal insolvency agreements.

  • Who has requested your report: If you have applied for credit, the credit provider may have requested a copy of your credit report. These enquiries are listed on your report.

Your credit score

Your report may include a credit score which is a number between 0 and 1200. This is a measure of your credit worthiness and how financially responsible you are. It is based on the information in your credit report. Some credit reports don’t contain scores, which can be obtained separately.

You can check your credit score easily and it will only take a minute via the website below. This score is generated by Veda which is one of the credit reporting agencies. When you access it, a file access will be noted on your credit report but this will not negatively impact your score.

What lenders look for

Apart from your score, lenders carefully look at the information on your report. The sorts of things they look for are:

  • Whether your personal information matches with what you have provided, including your previous address and employment history
  • The number of credit enquiries and who they were with. Enquiries from certain credit providers may not be looked on favourably like payday lenders
  • Current credit accounts, if they have been closed, the credit limits and whether these match what you have disclosed
  • Details of defaults including when they occurred, when they were paid, how much the it was for and who it was with. All these provide details of your credit history, whether you take responsibility and pay your debts as soon as you can. It is also used corroborate your version of what occurred.

Defaults on your credit report

Missed repayments on bills or other debt may result in a default being recorded on your credit report. This may occur when:

  • The default amount is $150 or more
  • You are 60 days or more passed the due date
  • You're a 'confirmed missing debtor' or 'clearout' which means that your creditor can't get in contact with you
  • The creditor has asked you to pay the debt either in person or in writing

When will the default disappear?

A default will stay on your credit report for 5 years (7 years for a clearout). Even if you repay the debt, it will remain on your report, but it will show that it is paid and the date of payment.

How to get a copy

It is recommended that you regularly review your credit report. You are able to receive one free copy every year, but there is a 10 day waiting period. There is also an option to pay to receive the report sooner.

There are a number of credit reporting agencies that hold information about you. To obtain a copy of your report try these:

  1. Veda - www.mycreditfile.com.au
  2. Dun & Bradstreet - www.checkyourcredit.com.au
  3. Experian - www.experian.com.au/credit-services/credit-reports

Mistakes on your credit report

There are certain mistakes that can occur on your credit report, which is why it is important to regularly check your report. Some mistakes you should look out for include:

  • Credit reporting agency mistakes
    • Name or date of birth is incorrect
    • Address needs to be updated
    • Debt is listed twice
    • The debt amount is recorded incorrectly
  • Creditor mistakes
    • You are listed as having a default, when you don’t
    • The creditor did not contact you when the debt was outstanding
    • A default was recorded when the debt was in dispute
    • The default amount is incorrect
    • A payment arrangement was made between you and the creditor, but this was not updated on the report.
    • A fraudulent account was created

Steps to fix credit report mistakes

  1. If you disagree with a default, contact the creditor. You can ask to have the default removed and the credit reporting agency will be contacted to remove it from your record.
  2. If the creditor does not agree, contact an Ombudsman service for further help. For credit cards and loans contact the Credit & Investments Ombudsman, for telephone accounts contact the Telecommunications Industry Ombudsman and for energy accounts contact the Energy and Water Ombudsman in your state.
  3. To avoid fraudulent activity you can put a ban on your credit report to ensure only credit providers can access your information.

What to do if your credit application is declined

Reporting agencies only collect and update your credit information. They do not make recommendations. A decision to approve or decline your application rests solely with the credit provider. They will have policies and guidelines that they use as a basis for their credit decisions.

If your application was for personal credit, lenders are obliged to tell you if your applications was declined due to information contained in your credit report.

There can be lots of reasons why an application is declined and potentially it can be a combination of factors. Things like level of income and commitments, number of loans and credit cards you have, your employment stability, location of your property, amount borrowed compared to the value of the property, single or couple, your credit score and details on your credit report including defaults.

Try to find out as much information as you can about the reasons for the decline. When you apply for credit again you can speak to the new lender specifically about these and whether they will also impact an application with them. This will save you getting more credit enquiries for loans that you will not qualify for.

Top tips for protecting your credit worthiness

  1. Don’t make multiple credit enquiries: Each time you submit a loan or credit application to a lender, it will be noted as an enquiry on your credit report. Lenders don’t know if this enquiry resulted in you taking out the loan, changing your mind or being declined. Lots of credit enquiries could be an indication that you are in financial trouble and result in the lender being more cautious about your application.
  2. Keep debt to a minimum: If you have a number of credit cards with large limits or other loans, the best thing you can do is pay off as much owing as you can, reduce the limit and if you have credit cards that you are not using, cancel them. This will help ensure that you don’t overlook a repayment and limit your reliance on credit.
  3. Make repayments on time: Set a reminder on your phone the day before a bill is due or use direct debit and schedule automatic repayments. This way, you won't have to worry trying to remember when they are due.
  4. Regularly check your report: Check your credit report every 12 months so that you are up to date with what is listed and you can fix any errors straight away.
  5. Change of address notification: When you change addresses, ensure that you get your mail redirected and notify all companies that you deal with of your new address. If a credit provider can’t find you, a debt you may not know about may be recorded as a default on your report.
  6. Pay any defaults as soon as possible: Most lenders will require defaults to be paid before they will approve your application. If this is done quickly after it is listed then this will provide evidence that you take responsibility.
  7. Be careful with guarantees: Think carefully about being a guarantor for another person’s debt. You should seek legal advice so that you understand all the implications including what happens if they default.
  8. Limit credit report access: Make sure that you are aware that a lender is going to make an enquiry on your credit report. If it is just a casual conversation with a credit provider who is doing some calculations, before you give over too much of your personal information ask whether they plan to do a credit check. Your permission can be given in written or verbal form. If they are going to access it, think carefully about how serious you are about taking up the credit and whether it is worth an enquiry.

If you don’t have the best credit history, it doesn’t mean you can’t get a home loan. But it does mean that you will need to do your homework and get the right advice. The team at State Custodians specialise in bad credit home loans and can go through different scenarios and come up with a personalised solution to suit your situation. Call on 13 72 62 or leave your details here for a Lending Specialist to contact you.

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