This fact sheet is for information only. The credit reporting laws are complex and technical. It is recommended that you get legal advice about your situation.
Jin had a personal loan with a credit union. Jin was upset to receive a default notice on his loan as he had been making his required loan repayments. Jin went down to the credit union and discovered that due to a processing error, his payments had not been credited to his personal loan for three months. The credit union fixed the problem, adjusted the interest charged and apologised to Jin. Jin paid the personal loan out about a year later.
Jin then decided to get a home loan and his application was rejected because of his credit record. Jin got a copy of his credit record and found a listing from his credit union from 2 years ago stating he was over 60 days in default on his now repaid personal loan. His repayment history was also affected showing he was behind in repayments for 3 months.
WHAT IS A CREDIT REPORT?
Your credit report is a record containing some information about your dealings with credit providers. The report is held by a credit reporting agency and accessed by credit providers with your consent to find out about your credit history. You normally sign a consent for creditors to access your credit report when you make an application for credit.
Credit reports were established as a way of warning credit providers about borrowers who had not reliably repaid their past loans. There is more than one credit reporting agency. The largest credit reporting agencies are Equifax, illion (formerly Dunn & Bradstreet) and Experian.
Credit providers regularly use credit reporting agencies to assess whether they should give you a loan or a service. For this reason, it is important that the information on your credit report is accurate.
Credit providers are any business where payment is deferred for more than 7 days. Examples are finance companies, telecommunication companies and utilities. To be able to list and access your credit file the entity must be in a registered External Dispute Resolution (EDR) scheme.
WHAT INFORMATION CAN BE RECORDED ON YOUR CREDIT REPORT?
This is a summary of the main information included:
- your personal details including your name, address (and past 2 addresses), gender, employment and driver’s licence number;
- details of any joint applicant for credit;
- records of credit applications made;
- details of your current loans;
- accounts where you have been in default over 60 days. Where the account was listed as being over 60 days in default and that default was settled or paid, your credit report will also list the date the default was paid. The listing does not fall off just because you have paid it;
- debt agreements and bankruptcies;
- court judgments;
- repayment history information on your loans; and
- “clearout listings” (called a serious credit infringement). This is where the credit provider has tried to locate you unsuccessfully and reasonably believes that you have decided not to pay the debt. Obtaining credit fraudulently may also lead to a serious credit infringement listing.
CHANGES TO CREDIT REPORTING
Since March 2014 there is more information that may be collected and put on your credit report including:
- type of account;
- account open and close dates;
- credit limit (NOT outstanding debt);
- terms and conditions eg. loan term, type of security, interest only or principal and interest;
- repayment history information.
This means your credit report will contain information about your current loans and whether you have made any late payments (repayment history information).
These changes do not apply for telecommunication or energy debts.
HOW LONG DO THE ABOVE LISTINGS BY CREDIT PROVIDERS STAY ON MY FILE?
- Name, address etc. → No limit
- Defaults → 5 years from the date of collection by the credit reporting agency
- Clearout/serious credit infringement → 7 years from the date of collection by the credit reporting agency
- Current loans → 2 years from the date the loan ends
- Repayment history information → 2 years from the date the monthly payment was due and payable
- Court judgments → 5 years from the date of judgment
- Part IX Debt agreements → 5 years from the date of the debt agreement, or 2 years from the date the debt agreements is terminated or declared void, or when the debt agreement is completed – whichever is the longer.
- Bankruptcy → 5 years from the date of the bankruptcy or 2 years from the date the bankruptcy ends, whichever is the longer.
YOUR RIGHTS UNDER THE PRIVACY ACT
You have rights under the Privacy Act in relation to your credit report.
- You can get a copy of your personal credit report for free once every 12 months or when you are refused credit: see How to get a copy of your credit report, below, for details.
- You can request incorrect information be amended or a dispute noted on your file.
- Your credit report cannot be looked at by anyone other than credit providers, potential credit providers, mortgage insurers and the credit reporting agency.
- You should be told by the credit provider if a loan is refused because of listings on your credit record.
- The credit provider must seek your consent to:
- view your credit report; and
- give information to a credit reporting agency, if required.
These consents are almost always contained in the application form.
HOW TO GET A COPY OF YOUR CREDIT REPORT
A copy of your credit report can be obtained for free online by contacting:
- Equifax mycreditfile.com.au
- illion (formerly) Dunn & Bradstreet illion.com.au
- Experian experian.com.au
Your report should be received within 10 working days of the credit reporting agency receiving your request. You can get your credit report faster by paying but this is usually not of any assistance in getting a problem resolved.
IMPORTANT: You should note that it is likely that your current contact details will be able to be obtained by any previous lender when they are supplied to a credit reporting agency. If you are avoiding your creditors, they are likely to be notified of your new address if you apply for a copy of your credit report.
WHEN CAN A DEFAULT BE LISTED ON MY CREDIT REPORT?
All of the following must occur before a default can be listed on your credit report:
- 60 days must have passed since the default;
- A section 6Q notice under the Privacy Act must be sent to you telling you the payment is overdue. This notice is often merged with a section 88 default notice under the National Credit Code (but it isn’t always);
- A section 21D(3) notice under the Privacy Act must be sent to you informing you that you will be default listed. The listing cannot be made until 14 days after the notice. The listing cannot be made more than 3 months after the notice; and
- The default has not been fixed before the listing is made.
REPAYMENT HISTORY INFORMATION. WHAT IS IT? HOW DO I MANAGE IT?
Repayment History Information (RHI) s information held about whether you have repaid credit on time. RHI can only be collected on credit regulated under the National Consumer Credit Protection Act 2009 (the “National Credit Act”), not utilities and other debts. If you are paying on time you will get a zero. If you are behind in your repayments you will get a number from 1 to 7 saying how many months you are behind in your repayments.
There is a grace period of 14 days and then any late payment (including part payment) is recorded on your credit report. The lateness of the payment is updated every 29 days. The notation indicates how many months the payments have been overdue. Part payments are recorded as late payments.
IMPORTANT: RHI is different to a default. You do not get any notice when the listing will be made. The only way you will know if a listing has been made is to check your credit report.
FINANCIAL HARDSHIP (UNDER THE NATIONAL CREDIT ACT) AND YOUR CREDIT REPORT
Repayment History Information: It is currently unclear how lenders will record your RHI when you apply for a hardship variation. Once you have applied for hardship, and your lender has agreed to a new repayment arrangement, your RHI should be recorded as zero (not late) from that day forward as long as you comply with the terms of the hardship variation. However, lenders do not always classify repayment arrangements as hardship variations and might therefore continue to report you as late even though you have made an arrangement and you are sticking to that arrangement.
It is important you clarify what will happen to your credit report when you make an arrangement and make a complaint if you are unsatisfied with the response. You should also get a copy of your credit report a couple of months later to check how your repayment history is being reported.
Default listing: A default listing cannot be listed if a request for hardship has been made (and it is the first request in the last 4 months). A default cannot be listed until 14 days after the hardship variation has been refused in writing. A default cannot be listed while you are in an external dispute resolution scheme: see our Dispute resolution fact sheet
WHAT ALL OF THIS MEANS:
- Request hardship (in writing if possible) as early as possible.
- Make an affordable repayment arrangements as quickly as you can and stick to it.
- Ask your lender how payments will be recorded on your credit report.
- Lodge in a dispute resolution scheme within 14 days of a request for hardship being refused. You should also lodge a dispute if the lender intends to report you as late on your repayments (or you find out later that they have done so).
Note: Getting a hardship variation will not fix any late payments that have already been reported to the credit reporting agency before you contacted your lender about hardship. These late payments will remain on your credit report for 2 years from the time of listing.
WHAT DO I DO IF THERE IS A PROBLEM WITH MY CREDIT REPORT?
Get a copy of your credit report. If the information in your credit report is wrong or misleading you can make a complaint.
Call or write to the credit provider and raise your dispute. You need to give reasons as to why the listing is misleading or wrong. The credit provider has 30 days to respond.
- You do not owe the debt listed. For example, someone used your stolen ID and obtained a loan. Write giving details of what happened and report it to the police. Then send a copy of the police report to the credit provider.
- The loan was not overdue for 60 days or you were not notified of the default. For example, you missed one payment on your loan and caught up and you were never 60 days in default. In this case you would send copies of your account statements as evidence.
- The amount of the debt listed is incorrect. Write giving evidence (for example, account statements or copies of letters from the lender and reasons why the amount is wrong.)
- The debt is very old and statute barred: see our Recovery of old debts factsheet
- The same overdue account has been listed twice. For example, your account was listed as overdue. You went overseas and had forgotten about the debt. A debt collector is now pursuing the debt and the default has been listed again.
- You were listed as a “clearout” and you were easily contactable and are now in contact with the credit provider. For example, you separated from your partner in a joint loan and forgot to notify the lender of your new address. You were always listed in the phone book or your mobile number never changed. In this case you would argue that it was unreasonable to list you as a “clearout”.
If the credit provider:
- fails to respond in 30 days; or
- refuses to amend or remove your disputed listing
The next step would be to raise the dispute in an external dispute resolution scheme (EDR).
The relevant dispute resolution schemes are:
Financial services eg. Loans, credit cards, rental contracts for goods
Australian Financial Complaints Authority (AFCA)
Ph: 1800 931 678
Telecommunications Industry Ombudsman (TIO)
Ph: 1800 062 058
Energy and Water Ombudsman NSW (EWON)
Ph: 1800 246 545
Insist on a reply in writing to your dispute.
If you are not satisfied with the decision of a dispute resolution scheme then you can make a written complaint to the Australian Information Commissioner. Visit oaic.gov.au or phone 1300 363 992. If you have suffered a financial loss due to an incorrect credit report you should include this in your complaint to the Australian Information Commissioner . Remember you only have 12 months from the date you became aware of the inaccurate listing to file your complaint with the Australian Information Commissioner. If your complaint in EDR is taking a long time, you should lodge a complaint with the Australian Information Commissioner before the 12 month time limit expires.
NEED SOME MORE HELP?
See our Getting help factsheet for a list of additional resources.
Last Updated: October 2018.