Your credit report reveals whether you’ve been paying your bills on time and it matters because it could affect your ability to borrow money.
If you’ve got a credit card, personal loan, mobile phone plan or utility account, there’s probably a credit reporting agency out there that has a file with your name on it.
Credit providers give this information to the credit reporting agencies and they also access this information to determine whether they want to lend to you.
Here’s a rundown of what info is likely to be on your report, how it could affect your ability to borrow money, how you can get a copy of your report and flag potential errors if you happen to find any, and some other things you’ll want to be across.
7 things you should know
1. What’s listed on my credit report?
A credit report is an assessment of your credit-worthiness and contains information such as:
- Your personal details.
- The credit cards you hold.
- Any credit you’ve applied for (including loans where you’ve gone guarantor)
- Details about your repayment history.
- Joint applications (if you’ve applied for credit with another person)
- Defaults (overdue payments of 60 days or more) and other credit infringements.
- Unpaid or overdue debts that have been paid.
- Bankruptcies, court rulings, debt and personal insolvency agreements
- Commercial and business loans you may have applied for.
You might also be interested to know that since 2018, the major banks and some other credit providers have been giving additional info to credit reporting agencies to provide a more complete picture of people’s history. This includes typical repayment amounts and how often repayments are made, so that good habits can now also be captured.
2. Does a black mark on my report matter?
A credit infringement could stay on your credit report for five years or more including when you’ve repaid the debt, although your report will be updated to indicate payment has been made.
Black marks on your report matter because should you apply for credit or a loan at some point in the future, you may be knocked back or even charged a higher interest rate due to a poor credit history.
Meanwhile, as each lender will assess your credit file against their own policies, there may be instances where some approve your application, while others reject it, or delay the process.
3. Who is collecting my information?
Credit providers (such as bank, phone and utility providers) send details to these agencies and then use this info to assess whether they want to lend to you and the likelihood you’ll pay what is owed.
4. Does it cost money to access my report?
A credit reporting agency must provide you with a free copy of your credit report once a year and within 10 days of your request. If you want a copy in a shorter time frame though, it could cost you.
5. What if my credit report has a mistake in it?
If you think there’s a discrepancy in your report, contact your credit provider. You can dispute the listing and if they agree it’s wrong, they’ll ask the credit reporting agency to remove it.
If you're not satisfied with the response from your provider, you can seek further assistance.
6. Can a credit repair company help if I’m in strife?
Credit repair companies may not always be able to do what they claim because in most cases, info can’tbe removed from your credit report unless it’s proven to be wrong. On top of that, they may charge you money to fix an error, which you may be able to do yourself for free.
These companies may be useful if you don’t have time to look into things yourself, but it’s vital you understand their terms and what they’re charging, as fees are often high.
General Advice Disclosure: This document contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. If you decide to purchase or vary a financial product, your financial adviser, AMP Financial Planning and other companies within the AMP Group may receive fees and other benefits. The fees will be a dollar amount and/or a percentage of either the premium you pay or the value of your investment. Please contact us if you want more information.