What do you know about your credit file and credit score?

In Australia today, most adults have a credit record that is being constantly updated.

Let’s look at it in more detail:


  • Who has your information and how is it gathered?

Independent credit agencies collect, collate, analyse and summarise personal information, then provide it to lending institutions so they can assess your credit worthiness. The two main bodies are Equifax and Dunn & Bradstreet, with Equifax being the largest – but lenders sometimes obtain reports from both, ensuring they secure the most complete profile.


Details are sourced from both the public record, such as ASIC and the judiciary, as well as all recognised credit providers including telecommunication and utility companies.Credit providers will typically include banks, credit unions, store card and mobile phone providers and the like, and you should consider all the products they cover including personal loans, mortgages, vehicle and equipment loans, credit cards, insurance – anything whereby you obtain a benefit or product prior to making a payment.


  • What details are held?

Standard personal information has always featured: identity details such as date of birth, gender, residential addresses, driver’s licence number and employment information.


Agencies are ‘fed’ information by lenders on all financial aspects including the good and bad stuff. For example your credit card provider may feed information to your file about how good (or bad) you are at making payments on time.

This creates a more comprehensive picture of the individual as even if a default has been lodged other positive factors, such as regular repayments over the long term, can be taken into consideration when assessing future creditworthiness.


Upon request, credit agencies supply clients (usually financial institutions/telco/utility companies) with both a credit report and credit score for their applicant.


  • What is a credit report?

This comprehensive document contains information relating to your credit history, including credit applications that did not go ahead.


For example, if you apply for a home loan and approach several banks, each application will be recorded with the date your credit file was requested. Subsequent lenders have access to this information and will see multiple inquiries over a short period, maybe a few weeks, and this could arouse suspicion as to why you are either shopping around or being turned down by other financial institutions.


Also included are the types of credit accounts you hold, any credit limits applicable and dates accounts were opened or closed.


Your financial repayment history reflects whether or not you have been sticking to deadlines, which is of extreme interest to possible new lenders.Overdue debts, defaults and number of days in arrears stay on your record for a substantial time and will, without question, adversely affect your ability to borrow in the long-term.


  • What is a credit rating or score?

Your credit score is a numerical snapshot of your credit file at a particular point, and provides an overview of your financial history.Each part of your file is scored, using a sophisticated algorithm, then added together to give an overall rating.


This is the first item to be checked by a potential lender and, with a very low score, they will know that the report contains major negative contributors.


  • So, how do I ensure I optimise my credit profile?

In short: keep your credit file clean! Make sure you pay ALL of your bills on time, including utilities and do not apply for credit too often. You do not control whoever is updating your file, but you can control the quality of the data. Check your credit file yearly to make sure it’s accurate. It’s also free! CLICK HERE to go to Equifax to check your file.