Credit Reports – How consumers can find and fix errors

The law requires credit reporting bodies to make sure that information on a consumer’s credit report is accurate, up to date, relevant, complete, and not misleading. However, errors can occur. 

When a consumer obtains a copy of their credit report , they should check the following information:

  • Debts or loans – are the credit accounts listed correctly?  Are there any listed that do not belong to the consumer? Is the credit limit listed correct on each one, and are there any duplicates? Is the record of whether the consumer has made repayments on time accurate?
  • Defaults – the consumer may see defaults listed if any repayments were more than 60 days late. Check that these details are correct and that the consumer received notices about the defaults before they were listed.
    • If they have paid an overdue payment in full, check that this is reflected in the report. 
    • If there is a ‘serious credit infringement’ listing (that is, they are listed as a missing debtor because they ignored repeated attempts to contact them or because the credit provider was unable to contact them despite repeated efforts to do so), suggest that the consumer contact the credit provider to discuss any outstanding debts and arrange for their repayment. 
  • Recommend that they check that the information used to identify them is correct, such as:
    • name and date of birth
    • current and two previous addresses. 

You can explain to consumers that if they are concerned about information being entered on their credit report , and wanting to check its accuracy when it is entered, some credit reporting bodies also offer to alert consumers to changes on their credit report . However, they will charge for this service.

You should stress the importance of checking a credit report carefully because incorrect listings may affect a consumer’s ability to get credit in the future.

Incorrect listings or activity on their credit profile may also alert a consumer to potential identity theft which occurs when someone uses a consumer’s details to apply for credit. If a consumer believes they are the victim of identity theft , they should alert the credit reporting bodies or credit provider so they can help to resolve the issue and ensure their credit profile is not adversely affected.

What to Check on Your Credit Report

How Can A Consumer Fix An Error On Their Credit Report ?

What happens if a consumer has a complaint about the information reflected on their credit report ?

The law has very clear procedures for dealing with incorrect information, and you will need to clearly explain to a consumer how to go about raising a complaint or dispute. 

The Privacy Act has safeguards to make it easier for consumers to have potential errors investigated and resolved. Any credit provider or credit reporting body who the consumer has dealt with is required by law to investigate any correction requests when asked to do so by the consumer. 

This applies even if the information the consumer is seeking to have corrected was not reported by the credit provider or credit reporting body the consumer gave their correction request to.  On receiving a correction request by a consumer that information showing on their credit report is incorrect, the credit provider or credit reporting body the consumer made the request to is required to action this request. They are not permitted to refer the consumer to a different organisation – they must engage with the relevant credit provider /s or credit reporting body on behalf of the consumer.  

The correction request must be investigated and concluded within 30 days.  Once the matter has been investigated, the consumer must be provided with a response indicating whether or not a correction will be made (and if not, why not). 

If the consumer feels that the credit provider or credit reporting body did not properly attend to their correction request or if it was not concluded within the 30-day timeframe or if they were not satisfied with the outcome, this can be escalated to that organisation’s nominated external dispute resolution (EDR) scheme, or to the Office of the Australian Information Commissioner .

It must be stressed that a credit provider or credit reporting body can only remove a default on a consumer’s credit report if it is factually incorrect, in other words, that the default did not occur. This could happen for example if the payment had been made but the credit provider’s system didn’t record the payment or if the debt itself was in dispute.  If a default listing has been correctly reported, it cannot then be removed.  After 5 years from the date of listing, the default will “expire” and will then be removed from the consumers’ credit profile.

For example, if the consumer challenges the listing of a default on the grounds that the consumer believes has been paid, the credit provider in question must investigate the issue and inform the consumer and the credit reporting body of the outcome.  In the process of investigating, they may, for example, ask the consumer to provide evidence of the payment.  If the consumer is right and the amount in question had been paid, the listing will be changed to reflect that the amount has been ‘paid’. However, paying off a defaulted debt does not remove the default listing from a consumer’s credit report ; the listing will be updated to say it is a ‘paid’ default .

Consumers should be wary of ‘credit repair’ companies that will offer – for a fee – to remove a default listing from a credit report . If the listing is correct, it can’t be removed. If a consumer thinks the listing may be incorrect, they can resolve this themselves without having to pay a fee to anyone. Find out more about dispute resolution.