Credit Reports – 11 Things you Really Should Know About your Australian Credit Rating
A credit report is information sent to private credit checking firms, typically by banks, lenders, utility companies, telecoms and internet suppliers about how customers manage their accounts with them. This information is then used by other banks, lenders, utility companies, etc to decide if potential customers are an acceptable risk when it comes to granting credit.
Consumers can get a free copy of their credit reports by writing to the credit checking firms. They can expect to receive a response within 10 days of writing.
Credit reports include personal information that includes name, address, date-of-birth, employment and drivers’ license details to help lenders confirm the identity of potential customers. Records from public sources such as bankruptcy and judgments may also appear on a consumers’ credit report.
A credit report will also tell lenders when an applicant has defaulted on any contracts where payment was deferred for more than a week. For the default to be listed with the credit checking firm, the payment has to have been more than 60 days late and action needs to have been taken to recover the debt. This includes paid up credit defaults, which should be recorded as settled.
Credit applications made by consumers will appear on their credit file, along with serious credit infringements – where a bank believes there to be strong evidence of fraud, such as when someone moves home to avoid paying their debts.
The length of time a listing will stay on a credit record varies depending on the type of information concerned. Credit applications, defaults and court judgments remain on record for 5 years. More serious listings, such as bankruptcy orders or serious credit infringements will be recorded for 7 years.
The companies who compile credit reports in Australia are Veda Advantage, Dun and Bradstreet and the Tasmanian Collection Service who hold records about Tasmanians. Veda Advantage can be contacted at: Veda Advantage Public Access, PO Box 964, North Sydney NSW 2059. Dun and Bradstreet at Public Access Centre, Dun and Bradstreet (Australia) PL, PO box 7405, St Kilda Road, VIC 3004. Tasmanian Collection Service can be contacted at GPO Box 814H, Hobart, TAS 7001.
Consumers can have errors fixed by writing to the relevant credit provider and credit reference agency. The Federal Privacy Commissioner is the agency to contact if a consumer is having difficulties getting an error fixed. The FPC can be contacted at GPO Box 5218, Sydney NSW 2001. Examples of errors that can occur are misspellings of names and addresses, identity theft, listing of debts that don’t belong to individual consumers, and defaults where the overdue payment period was less than 60 days.
Veda Advantage is the biggest credit reference agency in Australia with records on around 14 million Australians, followed by Dun and Bradstreet and the Tasmanian Collection Service.
Consumers often check their credit report for the first time when they are refused credit. This can happen because they have failed to repay a debt or they have had their identity stolen.
Australian credit reports are much different to those in the UK and US. In Australia reports are only allowed to show payment performance information once things have gone wrong. In the US and UK, lenders share payment performance histories with the credit checking firms on a monthly basis. This type of credit report information is sometimes referred to as ‘positive’ data, with the Australian default model sometimes being referred to as ‘negative’ data.