- Introduction to credit reporting
- Your rights
- Things to watch out for
- FAQs and other resources
- Resources for Customer Consultants
- About Credit Smart
My credit report
Your credit report contains details of your credit applications (such as for a mortgage, a credit card, a mobile phone or gas and electricity accounts). It also lists any significant problems you have had meeting repayments (such as defaults, judgements or bankruptcy). Where a credit report is sought for commercial credit purposes, your directorship details and some commercial credit information may also be on your report.
A credit report might also contain repayment information for some of your credit accounts.
Credit providers – such as banks and other financial institutions, and telecommunications and utility companies – use credit reports to help them determine if they will give you credit and, if so, how much. Information from credit reports can also be used by your credit provider over the course of the credit relationship.
Your credit report may contain information gathered from credit providers and publicly available databases. When given to a credit provider that holds an Australian credit licence, it may include some details of the repayments for those accounts.
Yes. To access your credit report, contact the major credit reporting bodies. Many credit providers use multiple credit reporting bodies, so you may need to request your credit file from each body to get a complete picture.
Generally, yes. An application for credit may require a credit provider to access your credit file. That access will then appear on your file, even if your credit application is not successful.
The record of this access, along with details of the credit provider, type of account, and amount of credit applied for, is called a ‘credit enquiry’.
A credit enquiry can only be removed if it is incorrect, or the credit application was fraudulent.
If a credit provider has notified you on their application form, that they intend to provide your information to a credit reporting body to process the credit application, and the application is then processed at your request, the credit enquiry is unlikely to be incorrect, and cannot be removed from your credit file.
Credit repair may ‘promise’ that it can have all credit enquiries removed, to improve the appearance of your credit report. However, paying a credit repair agent to dispute credit enquiries for legitimate credit applications may prove a waste of money.
Credit repair agents may use a standard dispute form, referring to sections of the Credit Reporting Code, Australian Privacy Principles Guidelines and the Privacy Act, saying you “rely on your rights” under the legislation to have the credit enquiry removed. What this means is that you dispute that the credit application was made with your consent, or that you were not notified by the credit provider that they would contact a credit reporting body to process the application.
Very few credit enquiries will meet this criteria. A credit provider will generally be able to respond to this dispute by providing evidence of your signed application form, and the appropriate notifications.
You are entitled to one free credit report every year, from each credit reporting body.
You can also get another credit report without charge from the credit reporting body if you show that a request for credit has been refused in the last 3 months.
More information on how to obtain a free credit report is available here.
Speak to the credit reporting body that provided the report, your credit provider, or a community legal centre. You can also see a financial counsellor for help with your credit report. Financial counsellors work in community organisations and provide advice about credit and debt issues. Financial counselling is free, independent and confidential. You can find a financial counsellor here.
A credit report about you may be held by each of the different credit reporting bodies. Credit reporting bodies are companies that collect your credit and personal information from credit providers and publicly available sources. Authorised credit providers use the information in your report to determine if you are a good or bad credit risk when assessing your application. Find out how to get a copy of your credit report.
Credit reporting bodies don’t make lending decisions – they only collect and hold data, and provide the information in your credit report to credit providers. It is the credit provider that decides whether or not to give you credit.
Credit providers and credit reporting bodies are obliged to ensure your credit information is accurate, complete and up to date and safe from unauthorised access or misuse. They risk substantial fines if they fail to comply with their obligations.
Information will come from publicly available information from government departments or agencies or from credit providers that disclose information about you.
You will usually authorise this disclosure as part of applying for credit. Your credit provider will need to notify you that they will send information to the credit reporting bodies and how you can access and correct that information.
Different types of information are kept for different periods of time. Details such as your name and date of birth may go back to when you first had a credit account (so long as you have kept a credit account open since then). Any default information and any record of payment of the default will stay on your credit history for five years, and your repayment history information will stay on your credit history for two years. Find out more about what can be included on your credit report.
If you are uncertain whether some specific information should still be on your credit history, you should contact the credit reporting bod or a community legal centre for advice.
The law restricts who can access your credit report and under what circumstances.
Generally your credit report can only be obtained from a credit reporting body by credit providers to whom you apply for credit, such as banks, finance companies or credit unions or telecommunications and utilities companies, or by organisations that provide mortgage insurance for a home loan. If you run a business, credit providers that provide a commercial loan or insurance for a commercial loan may also be able to access your personal credit report.
Your credit report can not be accessed by organisations that provide other types of insurance, real estate agents or your employer.
The law is designed to protect your information from misuse. Any organisation which holds, uses, collects or discloses your information will be subject to legal obligations. If incorrect information is placed on your credit file, you can seek a correction.
If you are not happy with the conduct of the credit reporting body, or credit provider, you can also make a complaint. If you may have been, or are likely to be a victim of identity fraud, you can seek a ban period preventing your credit information being accessed.
If you believe there is incorrect information on your credit report, you can contact the credit reporting body or the credit provider who listed the information, and they will investigate the matter for you. They will let you know the outcome of the investigation and, if needed, fix the information on your credit report.
You can ask any credit provider or credit reporting body that you are dealing with to investigate inaccurate information in your report.
If your credit information was not addressed on time, or your request was not dealt with in accordance with your rights at law, you can make a complaint.
No. A credit provider cannot use the information on your credit report to send you marketing material, otherwise known as ‘direct marketing’.
Of course, a credit provider is not restricted from sending you marketing material based on the information that it has on file about you (which hasn’t come from a credit report) – as long as it has notified you that it will use your information for this purpose, and that it gives you a means to opt out of receiving this marketing material.
There is an exception to the rule about not using credit reporting information for direct marketing – and that is when it is used for ‘pre-screening’. This means that a credit provider may provide your information to a credit reporting body to ‘pre-screen’ your information to determine whether you will meet particular eligibility criteria, which would then be used by the credit provider for the purposes of their own direct marketing. This may mean, for instance, that a credit provider may ask a credit reporting body to provide it with a list of its customers who live within a particular postcode, and your information would be provided to ‘screen’ you from this list.
Opting out of pre-screening
You have the right to ask a credit reporting body to not to use your credit reporting information for the purposes of pre- screening for direct marketing. Click here view names and contact details of the main credit reporting bodies in Australia.
If you request a credit reporting body not to use your information in this manner, it does not mean that you have opted out of receiving direct marketing – but rather that you have asked not to be included in the pre-screening process.
To opt out of receiving direct marketing, you will need to contact your credit provider directly and make this request.
Paying bills and Repayment History Information
It depends. If the bill is for a financial product, such as a home loan, personal loan or credit card, and the credit provider has chosen to report repayment history information about their customers, your good payment conduct will appear on your credit report and may be available to some other credit providers to see. However, not all credit providers can or will report this information, or some may take a while before they chose to report this information, so your good payment conduct will not always appear on your credit report.
ARCA has provided some tips on how to manage your credit effectively and how to avoid defaults.
Credit providers have always collected repayment history information about their borrowers for their own use. These are details of payments that are due to be made on an account such as a credit card or personal loan. You can check your statements, or call and request information on past payments. Your credit provider may charge you a fee for providing you this information.
However, only some credit providers can provide this information to credit reporting body to list on your credit report. In order to disclose this information, the credit provider must be licensed by the Australian Securities and Investments Commission, the national credit regulator.
Repayment history information is about whether payments that are due on an account during a month – such as a credit card, mortgage or personal loan – have been made on time (or within a ‘grace period’ of 15 days).
Only credit providers with an Australian credit licence can report and obtain repayment history. This means a licensed credit provider can obtain a credit report that has more information than the credit report that is available to a non-licensee, like a telecommunications or utility provider.
If you only pay part of the amount you owe, your credit report may still indicate that you have missed a payment.
You should pay your credit card, personal loan, mortgage, lease and other credit accounts by the due date. To make this easier, you could set up direct debits to make your payments directly from your bank account, or use direct credits to pay an amount each fortnight or month into your account. If you do this, when the payment falls due, you may only have a small amount still owing, or even have a credit balance.
Paying your bills by the due date might have a positive effect on your credit report. Licensed credit providers that have chosen to access repayment history can see the good (or bad) payment behaviour when you apply for other credit.
The credit reporting system is intended to help credit providers make better credit decisions. Credit providers are not allowed to use information in your credit report for direct marketing.
Credit providers want customers who can pay their debts on time, as the costs involved in debt collection can be high.
Offering credit is a highly regulated activity, and Australia has responsible lending obligations for credit providers. The law states that credit providers must not enter into a contract with you that is unsuitable, such as a loan you can’t repay without suffering hardship or a contract that doesn’t meet your requirements and objectives.
You may contact any credit reporting body or credit provider who has previously received your credit reporting information, even if that credit provider rejected your application for credit because of your credit report. You may also contact the credit reporting body or the credit provider who listed the information.
It is important to remember that information on your credit report that is correct can’t be removed. This means that if the credit provider or credit reporting body can demonstrate the information is correct, they will be unable to remove it even where you try to negotiate with them to do so.
If the credit provider or credit reporting body does not take action to correct errors within 30 days, your request can be escalated to their external dispute resolution scheme, or to the Privacy Commissioner.
You can also complain to these organisations if you feel your correction request was not dealt with appropriately or within the 30-day timeframe. Links to these and other organisations are listed under Helpful Resources.
Late payments and defaults
One late payment on your credit report is generally less serious than a default.
In certain circumstances, a late payment will appear on your repayment history information and it shows that you were overdue in paying your credit card, mortgage, personal loan or other credit product you hold with a licenced credit provider. The repayment history information will show you are overdue when you have not paid your account on time (or within a grace period of 15 days).
The occasional late payment on a credit report, for example caused as a result of being on holidays or overseas or simply being forgetful, may be offset by the overall positive history of paying most accounts on time.
However, if you have a pattern of late payments this may lower your credit worthiness - although each credit provider will have different criteria for approving credit.
It is important to remember that only credit providers with an Australian credit licence can report and obtain this sort of repayment history.
A default on the other hand is always a serious issue. A default can only be recorded on your credit report if the payment is more than 60 days overdue, is more than $150, and if you have received the required written notifications. For more details on what is required before a default can be recorded, go to Introduction to Credit Reporting.
If you are having difficulty managing your repayments, contact your credit provider as soon as possible. They can help if you are experiencing financial hardship, and provide various forms of assistance. If you contact your credit provider sooner rather than later, you’ll have a better chance of finding a solution that works for both of you. Find out more about hardship assistance.
No - you will not automatically get a bad credit rating for an overdue phone bill. Telecommunications companies and utilities are not able to report whether or not you make your payments on time. The only way your overdue phone bill will appear on your credit history is if it is listed as a default – it is 60 days overdue, you have been served with proper default notices, and you have still not paid it. Find out more about credit reporting.
Credit providers that hold an Australian credit licence can provide details of your repayments to a credit reporting body. If your repayment is late it may be reported as an 'overdue payment' (noting there is a 15 day grace period to ensure your payment has been processed). This is known as repayment history information. Licensed credit providers can access this information when assessing you for credit, and the late payment may affect your ability to get credit.
A default can also be listed on your credit report, and this a more serious situation. A default however cannot be recorded until the payment is more than 60 days overdue.
The overdue amount for a default must be more than $150 and you must receive written notification before the default can be entered. Default information can be reported and accessed by both licensed credit providers and those that do not hold an Australian credit licence (such as telecommunications or utility companies).
This will depend on the lending policy of each individual credit provider. Default information will remain on your credit report for five years.
The Privacy (Credit Reporting) Code (or, the CR Code) is a set of rules to help the organisations that participate in the credit reporting system to put in place clear, effective and consistent credit reporting processes and to support the legal requirements in the Privacy Act. It also places mandatory obligations on all credit providers that use the credit reporting system and on credit reporting bodies.
The CR Code was developed with input from credit providers and consumer organisations. It imposes legally binding obligations on credit providers and credit reporting bodies in addition to the Privacy Act requirements. The Office of the Australian Information Commissioner regulates the CR Code.
The legislation and other legislative instruments are available on the website of the Office of the Australian Information Commissioner (OAIC).
Privacy and identity theft
Identity theft is a serious issue, and it can be very distressing if it happens to you. By checking your credit report regularly, you could find out whether or not someone has falsely obtained credit in your name. If this has happened, you should contact the credit reporting body right away to tell them about the fraud. Some credit reporting bodies offer services to alert you when certain changes have been made to your file, for example, if someone conducts a credit check on you. If you haven’t applied for credit, you will know that someone has tried to use your identity to obtain a loan or credit card. If your credit report shows a credit application or contract that you did not apply for or have not entered into, you may have been a victim of identity theft. You should contact the credit provider and let them know about your concern.
You can ask credit reporting bodies to apply a ban that prevents your credit report from being accessed by credit providers without your permission (for a minimum of 21 days).
A thief may still be able to obtain credit in your name, but it would be harder for them to do so.
If a ban is in place, you can still provide written consent for the credit reporting body to release your credit file to process an application. However, it will depend on the internal processes of the credit reporting body as to whether they will provide a copy of your credit report to the credit provider, or directly to you. You should bear in mind that some credit providers will not process your application when a ban is in place; you can check the credit provider’s policy by contacting them directly. You should also check that the identity theft hasn’t resulted in false information being entered on your file, because this could have a negative impact on your credit application.