Oct
11
Everything You Always Wanted To Know About Your Credit Report
October 11, 2010 |
Your credit report is a very powerful report that essential controls what you can and cannot do in your life. Unfortunately many people aren’t aware of what a credit report actually is and what information is contained on the report. This article breaks down what is contained on your credit report and tells you everything you always wanted to know about your credit report but were afraid to ask.
Your credit report is nothing more then a very detailed snapshot of your financial history that is furnished to anyone supplying you credit from the credit bureau. There are three main credit bureaus that handle a majority of these credit report request. They are Experian, Equifax and Trans Union. Each of these organizations are private in nature and routinely furnish your credit information when asked to do so for a fee.
Generally speaking the credit reports provided by the credit bureaus are very detailed and very accurate. For instance it’s not uncommon for them to have information regarding missed payments as far back as 6 or 7 years. They collect this information in order to provide it to creditors prior to their providing any form of credit to a consumer seeking credit. The creditors can use the information they receive to determine if that same consumer can be considered a good credit risk. A good rating allows for more favorable credit terms while a poor rating essentially ends any chance for a consumer to obtain credit in the first place.
The amount of time that a blemish (such as a missed credit card payment) stays on your credit report can vary but normally these negative items are deleted after 7 years thanks to the Federal Fair Credit Reporting Act. Bankruptcies are another matter entirely and they normally remain in place for up to 10 years. Keep in mind that credit inquiries stay on your credit report for 2 years so closely monitor the number of times you apply for credit since a high number of inquiries can be viewed in a negative manner.
Until recently in order for a consumer to view their credit report they had to order a copy from one of the three main credit bureaus and pay a small fee. However new laws now allow for 1 free credit report every year to any consumer that wishes to see their credit report.
The power of your credit report is incredible. Even if you have built up a positive credit report any missed payment no matter how small the amount can result in a denial of credit. The best advice most credit can give is to stay current on your entire monthly financial or reoccurring obligations and don’t overextend yourself financially.
Hopefully this quick article answered a few of your questions regarding your credit report. More detailed information can be found in various locations throughout the Internet. Don’t forget to request your free copy of your credit report so you can see where you stand in the eyes of future potential creditors.
Timothy Gorman is a successful Webmaster and publisher of Debt-Relief-Solutions.com. He provides more debt relief, consolidation and credit repair information that you can research in your pajamas on his website.
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General Information
Who are Baycorp Advantage?
Baycorp Advantage are Australia’s leading credit reporting agency. Their activities are regulated by the Federal Government and the Privacy Act.
Their database contains more than 11 million consumer and 1 million commercial credit files. It includes records on the credit activity of Australian individuals, companies and businesses.
The credit data held is quite detailed and is regularly updated. It includes:
Personal details such as:
residential address
date of birth
drivers licence number
Credit applications and enquiries you have made during the past five years
Records of some current credit accounts
Overdue Accounts and Defaults which may have been listed against your name by credit providers
Bankruptcy information
Judgments
Public record information such as Directorships and Proprietorships.
Are there any other organisations I can get my credit details from?
While Australia also has other credit reporting agencies Baycorp Advantage are the biggest.
About Credit Files
What is a credit file?
A credit file is a comprehensive record on each financially active individual and entity in Australia. It includes your age, details of your employment, residential address, credit applications made, credit arrears, defaults, judgements, bankruptcies etc.
Does anyone not have a credit file?
Persons who have applied for credit in the past 7 years will have a credit file. Persons who have never applied for credit such as the young, new migrants etc. will not have a credit file.
When and how did my credit file start?
Your credit file is initiated by the credit provider the first time you apply for a loan, or make any type of finance application. Once your initial credit file is set up, subsequent credit providers update your file by adding the relevant credit application details and any change of address information.
Do I have to pay for access to my information?
There is no fee associated with access to a credit report held by a credit provider. Also, you will generally not be charged a fee for access to your file held by a credit reporting agency if access relates to a refusal for credit or is related to the management of your credit arrangements. If a fee has been requested and you have been denied access because you refuse to pay the fee, you may refer the matter to the Privacy Commissioner.
Understanding Your Credit File
For how long is my credit information be kept on the credit file?
Credit applications, enquiries and overdue accounts are held on your file for five years
Bankruptcy information is held on your file for seven years (prior to January 1998, Bankruptcy information was held for five years)
Clearout information is held for seven years (if listed before 31 January 2000, the information is held for five years)
Court Judgments are held for five years (excluding NSW & ACT)
Queensland & WA Writs & Summons are held on an individual’s file for two years, Company/ Business files for four years
Identity information, which includes name, date of birth, sex, drivers license, address history, and cross-reference names (if any) are held for the life of the credit file. This information is used to distinguish the credit file from others held in the database
Purge dates are calculated on the date the information was added to the file, and are based on the time limits provided in the Privacy Act 1988
Files are scanned each month and out of date information is automatically purged to ensure the files are accurate.
What can be done if the information is incorrect?
If you believe the information on your file held by a credit reporting agency is inaccurate you can request that it be altered. If the credit reporting agency establishes that an amendment is necessary, it must make the amendment to your file promptly. If the agency does not make the requested changes, you have a right to include a statement, provided by you, on your file. Once the amendment is made, or a statement is added, to your file, the agency will send you a copy of your amended credit information file and advise you that you have the right to nominate other persons who you would like to be informed of the change where those persons had access to your file in the previous three months.
How do I tell what my credit rating is?
Baycorp Advantage does not hold a score or credit rating on your credit file.
Some credit providers may score or rate an application as part of the process to assess the risk involved in providing credit to you.
This technique involves building a score or credit rating based on the information you provide on the application form and the information held on your credit file.
While there will be no Credit Rating with a number against your name , your past credit behaviour as reflected on your credit report will be used as a guide by future lenders in determining whether you have a “Bad Credit History” and whether you are a “Good Credit Risk”.
Credit Report Arrears and Defaults
What is an Arrear or a Default?
An arrear is a late payment on any one of your bills. This may relate to a Utility Bill or a Loan repayment. A Default is an Arrear that was not paid for an extended period of time. Defaults may be paid or unpaid.
If I pay my default will it come off the report?
Defaults will remain listed on your credit report even after they have been paid. In fact, depending on the nature of the default they may remain on your credit report for up to 5 years after they have been paid.
How do I remove an entry off my report?
There may be reasons why you believe that an entry should not have been made on your report and you would like to have it removed.
To achieve this you need to write to the credit reporting agency and the credit provider who listed the default on your credit report - and explain why the default should be removed.
What can I do if I think a credit reporting agency has not dealt with my access or amendment request properly?
You are entitled to have your problem handled under the dispute settling procedures set out in the Credit Reporting Code of Conduct issued by the Privacy Commissioner. Under these procedures, the credit reporting agency or credit provider should be the first point of contact for lodging disputes.
If the credit reporting agency or credit provider is unable to resolve the matter, or if you are not satisfied with the action taken, you are able to complain to the Privacy Commissioner who has the power to investigate the matter, and if necessary, to order credit providers or credit reporting agencies to change their procedures, amend information or compensate you financially for loss or damage resulting from a credit reporting infringement.
Issues with Credit Fraud
What is known as Credit Fraud?
One of the most common forms of credit fraud is committed by stealing’ the identity of another individual. Someone obtains your identity details and uses them to obtain credit for themselves, leaving you with the potential liability for this debt, a damaged credit reputation and the inconvenience of amending your credit file. This is done by either stealing your wallet, your driver’s license or any other personal information.
Please note that in Australia you are not able to change your driver’s licence number. Once it has been issued - it stays with you for life. As you know your driver’s licence is often used to identify an individual and if the number is stolen, a new one is created to match the original and then problem never goes away.
What steps should I take to protect my identity?
You need to guard your personal information such as your date of birth and your driver’s licence number, bank account details etc.
Contact your financial institution immediately if your cards are lost or stolen. Keep your PIN (Personal Identification Number) confidential and separate from your card.
What can I do if someone is using my identity or has done so in the past?
Credit fraud is a crime. If you believe that information held on your credit file has been caused by another individual fraudulently using your identity details:
Obtain a copy of your credit file to confirm someone has used your identity
Contact the police and report the crime
Contact the credit providers involved and inform them of the fraudulent activity, otherwise they may hold you responsible for any bad debt incurred.
My Credit Report and the Credit Providers
Will all my credit applications be reflected on my credit report?
No. However, most credit providers considering applications for credit, or the supply of goods and services where payment is deferred, choose to perform a credit check to ensure their decision to approve or decline an applicant is sound.
Once a Credit Check is performed by a credit provider it will be reflected as a Credit Inquiry on your credit file.
Who is able to add or change information on my credit report?
Any Credit provider who has been authorised by you to run a credit check and the credit reporting agency such as Baycorp Advantage.
Who can access my credit report?
Under the Privacy Act no one is allowed to check your Credit Report without your written consent.
If you would like to find out more about cleaning your credit or applying for a loan with a Bad Credit Rating, please visit www.webdeal.com.au or www.honeyloans.com.au
Maya Pavlovski holds a Bachelor of Commerce Degree from Melbourne University and is a qualified CPA
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