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Dan O'Sullivan

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What is a credit report?

A credit report is a comprehensive record of your credit history information. Every time you apply for credit or a loan, and the provider checks your credit score, a report is left on your credit file. Your credit report contains personal information, previous credit applications, adverse credit listings and, on some occasions, your recent repayment history on open credit accounts.

Also included in your credit report is your credit score. Your credit score is a numerical indicator of your reliability when borrowing money. Generally, the higher your credit score, the more reliable you are seen as a borrower.

Lending services can use your credit report to determine the risks of granting you a loan. A better credit report with a reliable history and higher score means they will be more likely to grant you a loan.

What information is included in my credit report?

Generally, the information included in your credit report includes the following:

  • Credit score;
  • Personal information;
  • Open credit accounts;
  • Credit and loan enquiries;;
  • Repayment history information;
  • Defaults/infringements;
  • Bankruptcies.

Credit score

Your credit score will generally fall somewhere between 0 and 1,200, though this may differ between credit bureaus. This score is calculated from a number of factors, including your previous repayment history, credit enquiries, default listings, bankruptcies, and so on. For the most part, a higher credit score is an indicator of reliability. So, a good credit score can make the approval of future loan applications more likely.

There are many factors that can affect your credit score. These include making payments on time, the amount of money borrowed, and the number of credit applications made in the past seven years. Credit reporting agencies acknowledge positive credit behaviour, which can improve your credit score. Before applying for a loan, it can be helpful to conduct a credit rating check. This gives you an idea of your credit score and shows what a lender will see on your report.

Personal details

Some personal information, such as your name, date of birth, and address are on your credit report. Your credit file also contains your employment history information and current employment status.

It does not include your income, level of education, or marital status. With this information, credit reporting agencies can maintain accuracy across credit reports. Accuracy across reports helps protect against malicious activity, like identity theft.

Credit cards

Details on any credit cards you own will be present on your credit report. This includes payment history on card debt and credit limits. Your ability to adhere to credit limits is important to potential lenders. If you have exceeded credit limits before, it can have a negative impact on your credit score. Your credit report does not include details on purchases made with your credit cards.

Credit and loan applications

Credit reports display all previous credit and loan applications that have been reported to the bureau over the previous two years. This includes car loans, home loans, student loans, and other credit accounts. If you are applying for credit loans too often, it can have a negative impact on your credit score. This is because a hard enquiry occurs when applying for a credit or a loan and will leave a mark on your credit report. Too many applications in a short period of time can make potential lenders think you are unable to manage debts, which could result in a rejected application.

Repayment history information

A major influence on your credit score is your repayment history information. This is important to potential lenders so they can ensure their investment is going to be repaid on time. If your previous repayment history is poor, lenders will need to consider the risk of granting you a loan.

Defaults/infringements

Additionally, failing to resolve a credit account over an extended period of time may result in a credit default. This is a hard listing that is placed on your credit file advising that you failed to repay an account. Default listings are generally kept on a file for five to seven years. The more defaults on your credit report displays a higher level of risk for lenders. This is why making loan payments on time is really important to potential lenders.

Bankruptcies and court readings

Defaults are not the only infringements lenders can see on your credit report. Potential lenders are able to view bankruptcies, court readings, and personal insolvencies you may have filed for.

Do lenders see the same report?

There are three major credit reporting bureaus within Australia. These are Equifax, illion, and Experian. Your credit information will likely be different across each bureau as they only display the information reported to them, and creditors do not often report to all three. The information that a lender sees will depend on the credit bureau they are requesting from. Plus, the Australian credit reporting agencies use different reporting and calculation methods. Because of this, your reports from each agency can appear different.

How do I find my credit report?

You can access a copy of your credit report for free through the three major credit reporting agencies:

  • Equifax: 138 332
  • Experian: 1300 783 684
  • Illion: 132 333

Credit reporting agencies will deliver a copy of your credit report via mail or email within 10 days. Online applications can be available within two days.

It can be useful to access your credit report once every 12 months. You can also access your credit report every three months to keep track of your credit history. Potential lenders cannot see how often you access your credit report. Accessing your credit report also does not have any negative affect on your credit score.

Written by: Dan O'Sullivan