Do you know what’s on your own credit report and what it means? Many Australians have never checked their credit history and have no idea of what is on their credit report. This post will help you learn more about your credit report, your rights and how your credit report can help or hinder you when you want to borrow more money from a lender.
What is a credit report?
Your credit report is a document that records information about certain interactions you’ve had with credit providers. A “credit provider” is any business that gives you credit so that you can delay your repayments in return for interest and other fees. Examples of credit providers include finance companies like banks, credit card providers and home loan providers.
Your credit report is held by a credit reporting agency.
The largest credit reporting agencies in Australia are Veda Advantage, Dun & Bradstreet and Experian. Credit providers, like banks, will often want to access you credit report from these agencies to find out about your credit history to see whether it would be appropriate to give you a loan or a service. That’s why it is important that the information on your credit report is accurate.
Why is your credit report important?
Credit providers, like banks, are not the only ones that can access your credit report. You also have the right to access your own credit report. By accessing your own credit report, you can discover your credit score and determine your creditworthiness. Additionally, you can check whether the recorded information is correct before you make a loan application.
Credit report agencies claim that you will have a good or excellent credit score if it’s between 622 and 1200. The average credit score for Australians is 749. Your credit score is affected by a range of factors such as late payments, the amount owed in a missed payment and the frequency of missed payments.
If you have the confidence of a good credit score, then you’ll have more options when applying for credit and it can give you the upper hand when you want to ask for a better deal from a lender. If you have a poor credit score, then you can at least recognise the problem and take steps to either fix any inaccuracies in the report or improve your dealings with credit providers in future.
Each individual lender will have their own individual policies on how they assess people who apply for a loan, so your credit score is only a guide.
How to get a copy of your credit report?
You can get a copy of your credit report for free once a year by contacting any of the national credit reporting agencies:
You should receive your credit report within 10 days from the date of your request, but if you want your report immediately, then you may have to pay a fee depending on the credit reporting agency’s charges.
Your credit report rights
Under the Privacy Act, you have a number of rights regarding your credit report such as:
- You can ask for any incorrect details to be changed or a dispute to be noted in your report.
- You can get a copy of your credit report for free once every 12 months or whenever you are refused credit.
- Your credit report cannot be seen by anyone other than credit providers, mortgage insurers and the credit reporting agency.
- Credit providers must tell you if a loan is refused due to the details in your credit report.
- Credit providers must get your consent, usually in the loan application form, to view your report and give information to a credit reporting agency.
Problems with your credit report?
If you find that there are problems with your credit report, such as wrong or misleading information, then you can take these actions:
1. Get a copy of your credit report
Get a copy of the credit report where you believe there is a problem. This will help act as proof of your claim.
2. Complain to the credit provider
Contact the credit provider by telephone, email or mail in order to make your formal complaint. As part of your complaint, you must tell the credit provider why the listing in your credit report is wrong or misleading. The credit provider must reply to you within 30 days.
3. Raise the dispute in external dispute resolution
If the credit provider doesn’t reply to you within 30 days, or if they refuse to fix or remove the problematic listing, then you can raise the dispute in an external dispute resolution (EDR) scheme.
You should contact the relevant EDR scheme listed below:
4. Complain to the Federal Privacy Commissioner
If you’re still unsatisfied after the EDR scheme’s decision, then you can then make a written complaint to the Federal Privacy Commissioner.
You must complain to the Commissioner within 12 months from the date you became aware of the inaccurate listing.