Leslie Massey
Your credit history in Australia is a record of your credit behaviour, including the types of credit you have had and how you have repaid it. It is established as soon as you submit an application for any credit-related product or service, such as a mortgage, credit card, or personal loan. Phone contracts and utility bills are also included in your credit history. Your credit history is important because it is used by credit providers to decide whether to lend you money or give you credit. You can obtain a copy of your credit report, which details your credit history, from one of the three Credit Reporting Bodies in Australia: Equifax, Experian, and Illion. You are entitled to one free credit report from each of these bodies every three months.
| Characteristics | Values |
|---|---|
| How often can you get a free credit report? | Once every 3 months |
| How to get a free credit report? | Online, by phone or by mail |
| What is included in a credit report? | Personal information, credit enquiries, credit account information, bankruptcies and judgements, repayment history information |
| What is a credit score? | A score that determines how risky a lender considers you; a higher score is better |
| What affects your credit score? | Credit history, identity theft, financial habits |
| What is considered identity theft? | When personal information is compromised in a data breach |
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What You'll Learn
How to get a free credit report in Australia
Your credit report is a record of your credit history, including your credit rating, credit products, and repayment history. It also includes personal details such as your name, date of birth, address, and driver's license number. Lenders will review your credit report when you apply for credit to assess your profile and your attractiveness as a borrower.
In Australia, you can obtain a free copy of your credit report from one of the three Credit Reporting Bodies: Equifax, Experian, and Illion. You are entitled to receive a free copy of your credit report from each Credit Reporting Body once every three months. You can request your credit report online, by phone, or by mail. It usually takes a day or two to access your report online, but you may have to wait up to 10 days to receive it by email or mail.
If there are any mistakes or outdated information on your credit report, you can contact the credit reporting agency and ask them to fix it for free. However, be aware of companies that may try to charge you to remove negative information from your credit report. Only incorrect information can be removed, and you can do this yourself for free.
You can also get your credit score for free from an online credit score provider, which usually only takes a few minutes. These providers use data from one or more credit reporting agencies to calculate your score. However, they may require you to agree to their privacy policy and allow them to use your personal information for marketing purposes. You can opt out of this after signing up.
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What information is included in a credit report
A credit report is a record of your credit history. It includes your credit rating, the credit products you hold, and your repayment history. Credit providers use it to decide whether to give you credit or lend you money. You can access your credit report for free once every three months.
Your credit report includes personal details to identify you, such as your name, gender, date of birth, driver's licence number, employer, current and previous addresses. It also includes the 'band' your credit score sits in (for example, low, fair, good, very good, or excellent). Your credit report may also include your credit score, although not all credit reporting agencies do this.
Your credit report will include information about credit accounts relating to payments you have made in the last two years. This includes the type of credit, the name of the credit provider, and the dates the accounts were opened and closed. While an account is open, information about that account can be seen on your credit report. Once you close an account, the information can still be viewed for two more years.
Your repayment history is also recorded on a month-by-month basis. Other providers will see a 24-month history of the repayments you have made. Only banks, credit unions, and other finance companies can report or access your repayment history information.
Your credit report may also contain information about any instances in which you have failed to meet your repayment obligations, such as defaults, court judgments, or bankruptcies. It will also include any serious credit infringements for seven years.
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How credit scores are calculated
In Australia, credit scores are calculated based on the information in an individual's credit report. Credit scores are calculated by credit reporting agencies, such as Equifax, Experian, and illion. These agencies use the information in an individual's credit file to assign a score, which can range from zero to 1,000 or 1,200, or in the case of Equifax, zero to 1,200. A higher score indicates that the lender will consider the individual less risky, potentially resulting in better deals and lower interest rates. Conversely, a lower score may impact the ability to obtain loans or credit.
Credit reports include personal details such as name, date of birth, driver's licence number, employer information, and address history. It also includes information on credit products held, repayment history, and any defaults or bankruptcies. Credit scores are influenced by factors such as timely repayment of debts, credit utilisation, types of credit accounts, and the length of credit history.
It is recommended to regularly review one's credit report to identify any discrepancies or errors and address them promptly. Individuals can obtain a free copy of their credit report from credit reporting agencies, typically once every three months. Services like Credit Savvy and Equifax offer tools to monitor and improve one's credit score. Additionally, individuals can take proactive measures to improve their credit score, such as making timely repayments, maintaining a low credit utilisation ratio, and avoiding multiple credit applications within a short period.
Understanding how credit scores are calculated empowers individuals to make better financial decisions and take control of their financial future. By proactively managing their credit health, individuals can work towards achieving their financial goals and securing their desired loans or credit lines.
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How to improve a credit score
In Australia, credit reporting bodies like Equifax, illion, or Experian Australia calculate and report credit scores. Credit providers use your credit score to assess your profile and your attractiveness as a borrower. A higher score means a lender will consider you less risky, which could mean getting a better deal and saving money.
You can access your credit report and check your credit score through one of the credit reporting bodies. You are entitled to a free copy of your credit report once a year. You can also request a temporary ban on your credit report to ensure no unauthorised loans or credit applications are made.
If you notice any errors in your credit report, you can contact the credit reporting agency and ask them to fix it. This is a free service. Some companies may try to charge you to get all negative information removed from your credit report, but this is unnecessary as only incorrect information can be removed.
To improve your credit score, it is important to pay your bills on time. This includes credit card payments, utility and phone bills, and rent. You can set up automatic bill and credit card payments so you never miss a payment. Repeatedly missing repayments can have a negative impact on your credit score and may lead to referral to a debt collector or a default being recorded on your credit report.
It is also important to pay more than the minimum repayment on your credit card each month. This will help to reduce monthly interest charges and improve your credit score. Demonstrating that you regularly pay off your debt shows that you are capable of managing your money.
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What to do if there is incorrect information on your credit report
If you suspect that there is incorrect information on your credit report, the first step is to request a free copy of your credit report from a credit reporting body to check its contents. You can do this through a credit reporting agency such as Equifax or My Credit File. In Australia, you are entitled to a free copy of your credit report once every three months.
Once you have obtained a copy of your credit report, you should review it carefully to identify any errors or inaccuracies. Common errors to look out for include incorrect personal details, such as your name, date of birth, or address, as well as incorrect information regarding your credit history, such as missed payments or defaults.
If you find incorrect information on your credit report, you should take the following steps to dispute it and request a correction:
- Contact the credit provider: Reach out to the relevant credit provider, such as the bank, lender, or utility company, to enquire about the information in dispute. Subject to the type of information, contacting the credit provider is often the most efficient way to get a correction made.
- Contact the credit reporting body: If the issue is not resolved with the credit provider, you can contact the credit reporting body, such as Equifax or any other relevant agency, and request that they correct your credit-related personal information. It is important to provide supporting documents or evidence to back up your dispute.
- Dispute process and investigation: The credit reporting body will then initiate a dispute process and investigate your claim. They will forward your dispute and any relevant information to the credit provider, who will have a set amount of time, typically 30 days, to respond and provide their findings.
- Correction and notification: If the investigation finds that the information on your credit report is indeed incorrect, the credit provider or credit reporting body must take reasonable steps to correct it within the specified timeframe. They must also send a written notice about the correction to you and any parties with whom they have shared the incorrect information.
- Follow up: To ensure that the correction has been made, you should request a new copy of your credit report after some time. If the issue still persists or you are not satisfied with the resolution, you can escalate the matter to an external dispute resolution scheme or seek further advice.
It is important to remember that you have the right to dispute errors on your credit report and request corrections. Do not hesitate to take action if you identify any inaccuracies, as your credit report plays a crucial role in your financial health and can impact your ability to obtain credit or loans in the future.
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Frequently asked questions
You can request a copy of your credit report from credit reporting agencies such as Equifax, Experian, and Illion. You can do this online, by phone, or by mail. You are entitled to one free copy of your credit report every three months.
Your credit report includes personal identifying information such as your name, address, date of birth, and driver's license number. It also includes credit account information, such as the type of credit account, credit limit, and payment history. Additionally, it lists credit enquiries or requests made by lenders in the last five years.
Your credit report plays a crucial role in your financial health. Lenders review your credit report when assessing your creditworthiness. A positive credit history can improve your chances of obtaining a loan or credit, while a negative history may hinder your ability to secure financing.
Maintaining a good credit score involves responsible credit behaviour, such as timely loan repayments and a stable credit history. It's also important to regularly review your credit report for accuracy and address any discrepancies.
If you identify incorrect or outdated information on your credit report, you can contact the credit reporting agency and request that they fix it. This service is typically provided free of charge. Be cautious of companies offering to remove negative information from your credit report for a fee, as only inaccurate information can be removed.
