What looks bad on my Credit File?

Can shopping around for credit impact my credit report?
Every time you apply for credit and a credit provider obtains a copy of your report, an enquiry is added to your credit report. This can include any loan, mortgage or utilities applications you may make. Credit providers may take a negative view of a relatively high number of enquiries made in a short space of time, which 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 on your application form, if you are existing customer as well as your credit report to assess your application.

Can paying my phone or electricity bill late impact my credit file?

Yes, it can. Under the Privacy Act 1988, an overdue debt can be listed on your consumer credit report when it is overdue by 60 days or more, when the debt is at least $150. Please note that information about whether your have paid your account on time each month or not cannot be listed by a telco or utility provider as they are not a licensed credit providers, unless you are 60 days or more overdue.

Before listing a default, the credit provider must have sent a written notice seeking payment of the overdue debt and a written notice stating that the default may be listed with a credit reporting body. 

Once you’ve paid the overdue debt, the credit provider is required to update the listing on your credit report to 'paid' as soon as is practicable. 

If the overdue debt is classified as a serious credit infringement, where you have left or appear to have left your last known address, the credit provider must first have listed a default and must have had no contact with you for the preceding 6 months.

The legislation does not place obligations on credit providers with respect to commercial credit defaults which means the obligations relating to consumer defaults and serious credit infringements does not apply to commercial defaults and clearouts.

If I do not pay the minimum balance on my credit card each month will this impact my credit report?

Yes, it can. From 12 March 2014 repayment history information, such as if you make your credit card and loan repayments on time, can be held on your credit report.  Whilst one late repayment, depending upon how late it was, followed by making your repayments on time, may not  significantly impact your credit worthiness, a number of late payments could be an indication you are in financial stress  and may negatively impact your credit report.

What to do if you can’t pay your bills or meet financial repayments?

If you can’t meet your financial commitments, 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 borrowers experiencing financial hardship. If you talk to them before you default, you may avoid having an overdue debt 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.

ASIC MoneySmart also provides information about managing debt on their website.

If I am refused credit, will it impact my credit report?

If you’ve been declined for 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.

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 may be taken into account by some lenders in their assessment of a credit application you make, along with other lending criteria. 

If you’ve been refused credit, you have a right to obtain your consumer credit information free of charge within 90 days of being declined credit. ASIC MoneySmart also provides information to help if you have been rejected for a loan.