KNOW THE RULES - Applying for credit
Your credit bureau file
To find out how well you have managed debt in the past, lenders look at your ‘credit bureau file’ for information about you and your credit history. Your credit bureau file is stored by a credit bureau.
In Australia, the main credit bureau for consumers is VEDA Advantage (formerly known as Baycorp) ( www.mycreditfile.com.au).
A credit bureau file is created when you first apply for credit. Once your file is established, information from subsequent credit providers is used to update your record. With some credit providers it is important that applicants applying for credit have an existing credit history as part of their assessment criteria.
Not everyone has a credit bureau file and not all credit providers submit information to the bureau.
In Australia, we have a ‘negative’ credit recording system, which means only credit enquiries and credit related problems such as missed payments will appear as a listing on the database. This can be for any sort of bill, from your phone bill to your credit card account. Always be aware that missed payments could affect your ability to secure credit with the lender of your choice in the future.
What a credit bureau file involves
Your credit bureau file contains the following:
- Identification - includes your name, address (past and present), date of birth, your current and previous employer/s and your driver’s licence number.
- Credit applications - details of any applications you have made for credit in the past five years, including the amount and type of credit. Be aware that these enquiries may include finance related credit enquiries as well as enquiries from others who provide credit such as phone companies.
- Credit defaults - defaults may be recorded by credit providers where you have not met your repayment obligations. For example, any repayments that are overdue for sixty days or more are listed on your file for five years. If you subsequently repay any credit defaults, it will be noted on your credit bureau record.
- Credit infringements - if a creditor has been unable to contact you and has reported you as a ‘missing debtor’, it is recorded on your file for seven years.
- Other information - details of any bankruptcies or court judgements against you are also noted on your file.
In some cases, the file will contain a note from you that you would like prospective credit providers to consider. This may be an explanation of a credit default or a name change.
Check your own credit history
It is a good idea to check your credit bureau file at least once a year to make sure the information is accurate. To get a copy of your credit file contact VEDA Advantage on 1300 921 621 or visit www.mycreditfile.com.au. A small fee may apply depending upon the level of information you request as well as the time and method you request for delivery of the information.
What if there’s a mistake?
The first time many people become aware of a mistake on their credit bureau file, is when they are unexpectedly knocked back for a loan. So, it’s worth taking a look at your credit bureau file before you apply for credit.
Check the accuracy of every entry on your record. If you do find a mistake, contact the named enquirer or your credit provider and the credit reporting agency in writing, asking them to amend the file.
If you have difficulties amending your file, you can take your complaint to:
- the Financial Ombudsman Service (www.fos.org.au) for banks, building societies or credit unions
- the Telecommunications Ombudsman www.tio.com.au (for phone companies)
- the Office of the Federal Privacy Commissioner www.privacy.gov.au.