What items look bad on a Credit Report?

Each time you apply for credit and a credit provider obtains a copy of your Credit Report, a credit enquiry is added to your Credit Report. Lenders and credit providers view negatively a relatively high number of enquiries made in a short space of time, as it is a potential sign of credit stress. This may in turn affect your ability to obtain credit.

However, the number of enquiries recorded on your credit report is just one piece of information a lender may consider when assessing your application for credit. Lenders look at a variety of information. For example, if you are an existing customer of the credit provider, it may take into account whether you have paid your bills (or made your loan repayments) on time.

Repayment history information, such as whether you make your credit card and loan repayments on time as well as any variation of repayment arrangements as a result of financial hardship will usually be recorded on your Credit Report. One late repayment – depending upon how late it was – probably won’t significantly impact your creditworthiness. But several late payments can indicate you are in financial stress and may make credit providers wary of providing credit to you.  

Because they are not licenced credit providers, telecommunication companies and utility providers can’t list information on your Credit Report unless you are 60 days or more overdue with a payment. 

Under the Privacy Act 1988, an overdue debt or default can only be listed on your Credit Report if it is overdue by 60 days or more and totals $150 or more. Defaults are viewed negatively by credit providers and can impact your ability to get credit in the future.

If there is a new arrangement in place that is wholly and partially related to any of your defaults, this will also be displayed in the Overdue Accounts section of your credit report.

If you have had a default in the past but have paid it and established a good repayment history, a lender may view your Credit Report more favourably. This is one of the benefits of comprehensive credit reporting.

If you have an overdue debt, where you have left or appear to have left your last known address, it can be listed as a serious credit infringement. This information is viewed negatively by credit providers and can impact your ability to get credit in the future.

If you can’t meet your monthly loan repayments or financial commitments in relation to your phone or utilities contracts, it’s important that you act quickly.

Firstly, talk to your credit providers and find out if they’ve got procedures in place to help customers experiencing financial hardship. If you talk to them before you default, you may avoid having a default listed on your Credit Report.

If you need financial advice or legal counselling, there are a number of free services offered by community organisations, community legal centres and some government agencies that may be of help.

If you’ve been denied credit by one credit provider and you continue to make a number of applications, the resulting enquiries on your Credit Report can negatively affect your chances of obtaining credit in the future.

Under comprehensive credit reporting, information on when an account is open and closed can also be held on your Credit Report. This, together with your repayment history, can help lenders get a clearer picture on your credit obligations and can be taken into account in their assessment of a credit application you make.

If you’ve been refused credit, you have a right to obtain your Credit Report free of charge within 90 days of being declined credit.

Learn more: CreditSmart helps explain what to do when you can’t get a loan.