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Credit Reports: Frequently Asked Questions

By December 6th, 2023No Comments
A woman's hand holding a tablet that shows "credit report" on the screen

What is a credit report?

A credit report is a detailed record of a person’s credit history and current credit obligations. It includes information such as the following:

  • The individual’s name
  • Address
  • Date of birth
  • Employment history
  • Details of all credit accounts, including credit cards, loans, and mortgages
  • Repayment history including missed or late payments
  • Overdue accounts including defaults and major credit violations
  • Credit enquiries made by a credit provider, including the type and quantity of credit you requested
  • Data from public records, such as verdicts from courts or bankruptcies

Lenders, financial institutions, and other credit providers use credit reports to assess an individual’s creditworthiness and ability to repay loans or credit card debt. A good credit report, with a history of on-time payments and responsible credit use, can lead to better interest rates and loan terms, while a poor credit report may make it difficult to obtain credit or result in higher interest rates and fees.

Every consumer with a credit history has access to credit reports. These reports are created using data from credit providers such as Equifax, Ilion, and Experian, as well as data from public records.

How do I get my credit report?

You can request a copy of your credit file from a credit reporting body such as Equifax, Experian or Illion, but you can also check your credit score for free on free credit score checking apps like Tippla.

You will be required to create an account and submit personal information, such as

  • Name
  • Email address
  • Birthdate
  • Mobile Contact
  • Address

They will also ask you to verify your identity. To prove your identification during the verification procedure, you must present one of the following documents:

  • Driving License
  • Identity Card
  • Passport
  • Medicare Card

How long do credit enquiries stay on a credit report?

Credit enquiries stay on a credit report for a specific period of time, depending on the type of enquiry. There are two types of credit enquiries:

  1. Hard enquiries: These are made by lenders or credit providers when you apply for credit, such as a loan or credit card. Hard enquiries remain on your credit report for five to seven years.
  2. Soft enquiries: These are made by companies that you have an existing relationship with, or by yourself when you request a copy of your credit report. Soft enquiries do not affect your credit score and are not visible to lenders or credit providers. They typically remain on your credit report for 12 months.

It’s important to note that too many credit enquiries, particularly hard enquiries, can negatively impact your credit score and make it harder for you to obtain credit in the future. It’s recommended that you only apply for credit when you need it and try to limit the number of credit enquiries on your report.

Can I obtain credit reports for free?

Yes, you can obtain a free copy of your credit report once every 3 months from each of the three major credit reporting bodies in Australia: Equifax, Experian, and Illion.

To request your free credit report, you can visit the website of any of the credit reporting bodies and follow their instructions for obtaining a copy of your credit report. You will typically need to provide personal identification information, such as your name, address, and date of birth, and may need to provide identification documents to confirm your identity.

It’s a good idea to check your credit report regularly to ensure that it is accurate and up-to-date. If you find any errors or incorrect information, you can contact the credit reporting body to have it corrected.

Can I get negative information removed from my credit report?

No, you cannot have accurate and up-to-date negative information removed from your credit report.

Missed payments, defaults, and court judgments will remain on your credit report for five years from the date of the event, while bankruptcy and debt agreements will remain on your report for seven years. Credit applications will also remain on your report for five years.

It’s important to note that while you cannot remove accurate negative information from your credit report, you can still take steps to improve your credit score over time. This can include making on-time payments, paying off outstanding debts, and reducing the number of credit or loan applications you make. Over time, these actions can help to improve your credit score and make it easier to obtain credit in the future.

How do I dispute errors on my credit report?

If you find errors on your credit report, you should contact the relevant credit provider or credit reporting body to dispute the information. The process for disputing errors on your credit report is regulated by the Office of the Australian Information Commissioner (OAIC), which is responsible for ensuring that credit reporting agencies comply with the Privacy Act 1988.

Under the OAIC’s guidelines, credit providers and credit reporting bodies are required to acknowledge your complaint within seven days and make a decision about the complaint within 30 days. If the credit provider or credit reporting body determines that they cannot resolve the complaint within 30 days, they must inform you before the end of the 30 days and request an extension for a reasonable period.

If you are not satisfied with the outcome of the complaint or dispute, you can complain to the OAIC or seek legal advice. The OAIC can investigate complaints related to breaches of the Privacy Act 1988, including complaints related to credit reporting.

What can I do to improve my credit?

There are several things you can do to improve your credit in Australia:

  • Check your credit report regularly: It’s important to check your credit report regularly to ensure that it is accurate and up-to-date.
  • Make on-time payments: Making on-time payments is one of the most important factors in determining your credit score. Set up automatic payments or reminders to ensure that you never miss a payment.
  • Reduce your credit card balances: High credit card balances can negatively impact your credit score. Try to keep your credit card balances below 30% of your credit limit.
  • Limit credit applications: Applying for too much credit in a short period can lower your credit score. Only apply for credit when you need it and avoid making multiple applications in a short period.
  • Close unused credit accounts: If you have unused credit accounts, consider closing them. Having too many open accounts can be seen as a potential risk by lenders.
  • Consider a credit repair agency: If you have negative information on your credit report that is incorrect or out-of-date, you can consider working with a reputable credit repair agency. These agencies can help you dispute errors and negotiate with creditors to remove negative information from your credit report.

Remember that improving your credit takes time and consistent effort. By following these tips and practising good credit habits, you can gradually improve your credit over time.

Australia’s Top 3 Credit Reporting Organisations

Credit reports in Australia are maintained by credit reporting bodies, such as Equifax, Experian, and Illion. These bodies collect information from various sources, including credit providers, courts, and publicly available information. They then use this information to create a credit report for each individual.

Quick Facts About Equifax

  1. Equifax is a global data analytics company headquartered in the United States.
  2. The company was founded in 1899 as a Retail Credit Company, which later became Equifax in 1975.
  3. Equifax operates in 24 countries, including Australia, Canada, and the United Kingdom.
  4. In Australia, Equifax collects and maintains credit-related information on individuals and businesses. This information is used by lenders and other credit providers to assess creditworthiness and make lending decisions.
  5. Equifax offers a range of credit-related services to individuals and businesses, including credit reports, credit monitoring, and credit scoring.
  6. In 2017, Equifax experienced a massive data breach that affected approximately 147 million consumers worldwide, including around 10% of the Australian population. The breach exposed sensitive personal information, including names, Social Security numbers, birth dates, and addresses.
  7. In response to the data breach, Equifax has implemented a range of measures to enhance its data security and privacy practices, including investing in technology and increasing its cybersecurity workforce.

Quick Facts About Experian

  1. Experian is a global information services company headquartered in Ireland.
  2. The company was founded in 1980 in the United Kingdom and has since grown to operate in 45 countries.
  3. Experian provides a range of credit-related services to individuals and businesses, including credit reports, credit scores, and credit monitoring.
  4. In Australia, Experian collects and maintains credit-related information on individuals and businesses. This information is used by lenders and other credit providers to assess creditworthiness and make lending decisions.
  5. Experian also offers a range of other data and analytics services, including marketing analytics, fraud detection, and identity verification.
  6. In 2017, Experian acquired Australian credit reporting agency CreditWorks, which has since been integrated into Experian’s broader operations in Australia.
  7. Experian has been recognized for its commitment to corporate responsibility, including its efforts to promote financial inclusion and support disadvantaged communities. The company has been named to the Dow Jones Sustainability Index for five consecutive years.

Quick Facts About Illion

  1. Illion is formerly known as Dun & Bradstreet (D&B).
  2. Illion is a data and analytics company that specializes in credit-related information and services.
  3. The company is headquartered in Sydney, Australia, and operates in Australia, New Zealand, and South East Asia.
  4. Illion collects and maintains credit-related information on individuals and businesses in Australia. This information is used by lenders and other credit providers to assess creditworthiness and make lending decisions.
  5. In addition to credit reports and credit scores, Illion also offers a range of other data and analytics services, including marketing analytics, business credit risk management, and fraud detection.
  6. In 2021, Illion was acquired by global credit reporting agency TransUnion, which operates in more than 30 countries.
  7. Illion has been recognized for its innovation and leadership in the credit reporting industry, including being named the Credit Bureau of the Year at the 2020 Australian Retail Banking Awards.
  8. Illion has also been involved in several community and philanthropic initiatives, including supporting organizations, focused on mental health and financial literacy.

An Easy Guide to Understanding Your Credit Reports

Understanding your credit reports is an important part of managing your credit health. Here is an easy guide to help you understand the key components of your credit reports:

  1. Personal Information: This section includes your name, date of birth, current and previous addresses, and other identifying information.
  2. Credit Enquiries: This section shows a record of all the times your credit report has been accessed by a credit provider or other authorized entity, including when you have applied for credit.
  3. Payment History: This section shows your payment history on credit accounts, including any late or missed payments.
  4. Defaults: This section shows any defaults or serious credit infringements, including court judgments or bankruptcy.
  5. Credit Accounts: This section shows all your credit accounts, including credit cards, personal loans, and mortgages. It includes information such as the credit limit or loan amount, payment history, and current balance.
  6. Repayment History Information: This section shows your repayment history for the past two years, including whether you have made payments on time or missed any payments.
  7. Serious Credit Infringements: This section shows any serious credit infringements, such as court judgments or bankruptcy.

Why Do I Need to Understand My Credit Reports

It’s important to understand your credit report because of the following reasons:

  1. Creditworthiness: Your credit report is a reflection of your creditworthiness, which is an important factor that lenders consider when deciding whether to approve your credit application. Understanding your credit report can help you identify areas where you need to improve your credit health and increase your chances of getting approved for credit in the future.
  2. Identity Theft: Your credit report contains personal and financial information, which makes it a valuable target for identity thieves. By regularly reviewing your credit report, you can spot any unauthorized activity or fraudulent accounts that may have been opened in your name.
  3. Errors and Inaccuracies: Credit reports can contain errors and inaccuracies that can negatively impact your credit score and creditworthiness. By understanding your credit report, you can spot any errors or inaccuracies and take steps to have them corrected.
  4. Financial Planning: Your credit report can provide valuable information about your financial history and habits. By understanding your credit report, you can identify areas where you need to improve your financial management and make more informed decisions about your finances.

Overall, understanding your credit report is essential for managing your credit health and achieving your financial goals. By regularly reviewing your credit report, you can take steps to improve your creditworthiness, protect yourself against identity theft, and make informed financial decisions.

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