Frequently asked credit questions

Frequently asked credit questions around the basics of credit.

• If I apply for credit, and am rejected or decide not to use the loan, will that appear on my credit report?

  Yes – the credit provider will get a copy of your credit report to help them assess your application. The details of that application will stay on your credit report for 5 years even if the credit provider doesn’t approve you or you get approved but decide not to use the loan.

• I have a copy of my credit report but I don’t understand it – where do I go for help?

  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. 

• Does a credit reporting body decide if I get approved for a loan?

  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’s the credit provider that decides whether or not to give you credit.

• How safe is my information?

  The Privacy Act (which regulates credit reporting) requires credit providers and credit reporting bodies to take reasonable steps to keep the information that they hold secure.

  If you are uncertain whether some specific information should still be on your credit history, you should contact the credit reporting body, or a community legal centre for advice.

• How does credit reporting work in Australia?

  Credit reporting is the sharing of information between credit providers and credit reporting bodies (Equifax, Experian and illion) about the lending products you have, such as credit cards, personal loans, home loans and overdrafts. Providers of other types of credit, such as phone, internet and utility providers, can also take part in credit reporting (although they cannot share the same types of information as lenders who offer credit cards, personal loans, home loans and overdrafts).

  The credit reporting system in Australia includes both positive and negative credit data about the credit history of Australian consumers. This is known as Comprehensive Credit Reporting (CCR), which provides a more complete picture of a customer’s situation and means that credit providers are better able to provide credit to match a customer’s individual needs. Currently, more than 95% of consumer credit accounts offered by banks, credit unions and licensed finance companies are reported by lenders to the credit reporting.

   

• What is Comprehensive Credit Reporting?

  The Comprehensive Credit Reporting system – or CCR for short – enables lenders in Australia to share information about your credit accounts, repayment histories and financial hardship with credit reporting bodies, who then consolidate this information into a credit report.
  
  CCR has been around for a few years and is tightly controlled under the law. It means that lenders have more insight into how you have managed your credit with other lenders. Importantly, under CCR, positive things that you do such as regularly paying on time are highlighted. This not only helps you shop around to get the best deal, but also helps lenders ensure they lend in a responsible manner.
  
  Under CCR, information that can be included in the credit report includes:

  • The type of credit product – e.g. home loan, credit card
  • The date the credit account was opened and the date it was closed
  •  The maximum amount of credit available (the credit limit)
  •  Repayment history information (RHI) which records, over a 24-month period, if account payments were made on time or not
  •  Financial hardship information (FHI) which records, if an account has been subject to a financial hardship arrangement in the last 12 months.
  • RHI and FHI can only be shared by lenders like banks, credit unions and licensed finance companies. It can’t be shared by phone, internet or utility companies.

  In Australia, there are three main credit reporting bodies - Equifax, Experian and illion and while each has its own way of displaying credit reports and calculating a credit score, they are all similar in the information they gather and provide.