What is a credit file?

A credit file is a record of your credit history maintained by credit reporting agencies such as Equifax (previously Veda Advantage).

The information in your credit file is accessed by banks to determine your risk as a borrower.

If the banks see a lot of irregularities on your credit file such as unpaid debts and missed payments they will decline your home loan application.

What information is listed in my credit file?

Most lenders are very cautious in lending money to borrowers who have a bad credit history that is either ongoing or where the adverse listings have not been cleared, therefore it is important to know what your credit history is like.

The following information is recorded on your credit file and can be seen by the banks and lenders:

  • Your full name, date of birth, gender, address, previous address, drivers licence number, employer and previous employer.
  • Records indicating the timeliness of the last two years’ repayments for your current debts.
  • Company directorships.
  • Loans that you have applied for in the last five years are listed as enquiries.
  • Loans or accounts where you are more than 60 days overdue are listed as defaults.
  • Court judgments.
  • Court writs.
  • Bankruptcy history (including Part IX history).

Did you know that approximately 14% of Australians have a default or other black mark on their credit file?

To save yourself from being turned down by the banks for a loan due to your bad credit history, simply call us on 1300 889 743 or enquire online and one of our specialist mortgage brokers will help you get approved!

How long does the information stay on my credit file?

The information stays on your credit file for a set period of time from the date it was lodged:

  • Current debt repayment history – 2 years
  • Court writs and summons – 5 years
  • Enquiries – 5 years
  • Defaults – 5 years
  • Court judgments – 5 years
  • Defaults (Clearout) – 5 years
  • Part IX – 5 years
  • Bankruptcy – Up to 7 years. 5 years from the day you become bankrupt and 2 years starting from the day the bankruptcy ends.
  • Last known address and employer – Indefinite

Keep in mind that paying a default does not remove it from your credit file, it just updates your file to show that the default was paid.

You can only have a default removed with the consent of the company that lodged the default on your file in the first place.

Why Comprehensive Credit Reporting (CCR) has changed the game

So-called positive credit reporting became mandatory with all lenders in July 2018 but what does this mean for you as a borrower?

It means that lenders and credit providers are now sharing information about your repayment history.

It’s no longer a matter of a default listing that will determe your chances at home loan approval.

Your Equifax score will now be affected by your payment history, even if your account is less than 30 days overdue (credit providers are obligated to provide a 14-day ‘grace period’).

Repayment history information (RHI) is rated on a sliding, letter-based scale so your score can be more easily affected.

On the flip side, CCR can help first-time borrowers more quickly build a credit history.

Learn more about comprehensive credit reporting and repaymeny history information.

Can I prevent defaults being listed on my file?

If you are experiencing financial hardship then there are measures that you can take to try to prevent adverse listings being lodged on your credit file.

  • Make your repayments on time: Set up automatic payments with your credit providers to ensure you don’t miss your payments and avoid defaults being marked on your file.
  • Keep in contact with lenders: If you are uncontactable then a default may be marked as a “clearout”, meaning that they could not find you, and this can stay on your credit file for two years longer than a normal default.
  • Pay something, not nothing: Ask your lender if you can make reduced repayments for a period of time until you can get back on your feet. Credit providers are required by law to resolve payment issues with the customers first before escalating to a debt collection agency.
  • Pay off your existing defaults: This is usually done by refinancing your home to roll your debts into one easy payment.
  • Keep your personal details updated: In particular, if you change address make sure you update these details with your credit providers and utility companies to ensure bills and invoices are sent to the correct address.
  • Close down unused accounts: This will help better manage your outgoings and will make you a stronger applicant because lenders base their borrowing power assessment on how much available credit you have, such as a credit card limit, not what you actually use on a monthly basis.

Please call us on 1300 889 743 or enquire online for more information.

How can I get a copy of my credit file?

You have the right to request a free copy of your credit file from each reporting agency once a year or 90 days since making a credit application.

There are several ways for you to get a copy.

Which method you use will purely depend on how urgently you need a copy. You can choose to do one of the following:

  • Write to Equifax: You will get a free copy within 14 days.
  • Apply on Equifax’s website: You will get it right away, although you will pay a fee.
  • If you are a customer of ours: Then just ask us to email you a copy of your file.

Your credit file is private information and cannot be accessed by unauthorised persons such as friends or relatives. You must consent to a lender either verbally or in writing before they can access your file.

Can I have more than one credit file?

Yes, it is possible for an individual to have more than one credit file. This is common if you have changed your name, usually due to getting married.

These are known as cross references. The lenders will see all of the credit files that you have as they are linked on Equifax’s system.

Your Equifax Score (previously VedaScore) will be calculated using the combined data of all of your credit files.

What if my credit file has errors on it?

Equifax obtains the data on your credit file from various sources, however, it predominantly comes from your previous loan applications.

Unfortunately, the bank’s systems are not perfect. In many cases, the data does not match and your credit file will contain incorrect information.

Of course, it’s important to ensure that you are filling out credit or loan applications correctly and in full.

If there is a mistake, you can correct it in two ways:

  • Contact Equifax: You can complete a form and provide evidence, then they will update your data.
  • If you are a customer of ours: We can update your data on your behalf using Equifax’s subscriber services.

It’s usually a good idea to have documents and other evidence on hand, such as a bank statement showing the date a payment was deducted from your account and paid to the company.

Credit providers are legally required to repond to you within 30 days and provide a written reaponse as to why the error was either removed or why there will be no correction made to your credit file.

What if I am unsuccessful in removing the error?

You can escalate this to Equifax’s External Dispute Resolution service.

If you otherwise feel like you need some professional help, you can make an appointment with a community legal centre or a financial counsellor who can provide free advice and assistance.

How do I open a credit file?

You don’t need to create a credit file, it is opened automatically when you first apply for credit.

The age of your credit file is important for your credit score.

For this reason it is a good idea for younger borrowers to open a small credit card with their bank once they are ready to take on the responsibilities associated with debt.

Who are credit providers?

Your credit file doesn’t just record your applications with banks and lenders.

Entities that are considered to be credit providers include:

  • Mobile phone companies.
  • Internet service providers.
  • Utility service providers such as water, power and gas companies.
  • Retail and grocery stores that offer store credit cards.

Who is Equifax and what do they do?

Equifax is a credit reporting agency that acquired Veda Advantage, who initially held the credit file for each Australian who has applied for credit.

They provide businesses, such as the banks and mortgage broking companies, with a copy of your credit file in return for a fee.

This allows mortgage brokers to take note of all the blemishes on your credit file to help them determine whether you are eligible for a home loan, and if so, which lender would approve your application.

Banks use the data on your credit file in their credit assessment and it forms a major part of your credit score.

Will my credit file affect my home loan application?

Yes! The banks and mortgage insurers are very wary if there are black marks or even too many credit enquiries on your credit file.

Please enquire online or call us on 1300 889 743 to discuss your situation in detail.

We may be able to find a lender that can still consider your situation.

Sometimes, we may even suggest you speak with a reputable credit repair service to improve your credit file.

  • Jonathan

    Hey, is there any mechanism to amend our credit file, or lets say we can change or make it look good than what it is :-)

  • Hi Jonathan,

    Your credit file is updated all the time. If you have recently made a credit enquiry it will show in you file and could reduce your score. Similarly, if your conduct with your banks has been good, it will improve your score.

    Below are some tips to improve your credit score:
    -Don’t overdraw your cheque account.
    -Don’t go over the limit on your credit cards.
    -Pay off your credit card debt as much as possible.
    -Pay all of your debts on time, every time.
    -Pay any defaults on your credit file and if possible wait for them to be removed.

    Also, you could refer to this page https://www.homeloanexperts.com.au/bad-credit-home-loans/credit-repair/ for more information on credit repair.

  • emily paul

    Today, my new score is 775 out of a possible 850; my Vantage score is 990 out of 990; my auto score is 905 out of 950; and my home score is 912 out of 950. All scores computed from the same database on the same day. Why the variances? Use of different algorithms. Who controls the algorithms? The rating agencies..What can you do about it—-nothing! I filed a complaint against the rating agencies in 2010 to the FTC, and to date, they have acknowledged receipt but have not responded..They are not going to respond. The rating agencies run wild.I don’t need new credit. I am 73 years old, and have assets. However, I do pay auto and home insurance each year and not having my home and auto scores maxed-out affects what I pay for home and auto insurance each year. Probably costs me several hundred dollars for my private residence and rentals.
    I repeat, the credit rating agencies have more power over your financial life than you can imagine, and they report to no one. Not one government agency will get involved in the algorithms used by rating agencies. It’s their call. Not even the new Consumer Protection Agency will touch this subject. I know. I tried to get them involved but got disappointed..As usual no response..I was able to put a full stop to through the help of a young man and now my scores are what I want it to be..He’s honest and very intelligent..The way he worked it all out I have no idea but he did..You should contact him today he will help change your life..hackhemp(AT)gmail(DOT)com.

  • Bills

    What if my credit file is empty and I have no credit record? Does this mean that I’m good to go because there are no bad credit records?

  • Hey Bills,
    Credit history plays a big part in a bank’s decision to lend. With no credit history, it means that it’s difficult for the lenders to tell how well you have been with your finances. This also means you have no credit score, making it harder to get a loan. However, you can still borrow though it’s often easier to take your time building a credit history rather than applying without one. Please check out the no credit history home loans page to learn more:

  • Charlotte

    Would my partner and myself get accepted if we had a $10000 credit card and missed a few payments sometimes and didn’t pay but we have now paid it off. Would we struggle to get approved and have a bad history even though it’s now paid off?
    Also if the above is all fine, do we need any savings at all as we have been Renting for 4 years and have never missed a payment on rent so we don’t have a lot of savings. Only like $1000.
    Your feedback would be greatly appreciated, thank you :)

  • Hi Charlotte,
    If you were more than 60 days late with your credit card then they may have lodged a default on your credit file https://www.homeloanexperts.com.au/bad-credit-home-loans/
    You can get a free copy of your credit file to check https://www.homeloanexperts.com.au/home-loan-articles/credit-file/
    If you have a clear credit file then it’s best not to apply with that bank that you had the credit card with as their system would likely give you a low score. Whereas other banks that don’t share data with that bank would be ok.
    A guarantor loan is the only way for you to buy a property as you are now https://www.homeloanexperts.com.au/guarantor-home-loans

  • Hutchinson

    What is a capped rate home loan? Is this similar to a fixed rate loan?

  • Hey Hutchinsn,

    A capped rate home loan is where your loan has a variable interest rate which can move up and down, and there’s a maximum interest rate, effectively limiting your risk. You benefit when interest rates drop yet can be protected if interest rates rise significantly. So this is like a middle ground between going with a fully fixed or fully variable rate.

  • MG

    Any other advantages of using a capped rate rather than fixing?

  • Hi MG,
    Aside from being protected from any unexpected interest rate increases in the market, capped rate home loans are usually cheaper than fixed rates. They are also more flexible, and similar to variable rates where you can make extra repayments without suffering from any penalties (maximum extra payments of 50% of the loan amount within the capped term).

  • Dylan

    What if my Equifax credit file has multiple enquiries listed on it? I had made some enquiries in few months back without realising the damage it could do!

  • Well, even if you have multiple enquiries on your credit file, there are still some lenders that can help. However note that you’ll have to provide a good explanation as well as cheque account statements, in order to prove which loans proceeded and which didn’t.

  • Flintoff

    Hi team, do all of the banks credit score?

  • Hi Flintoff,
    Almost all lenders do credit score. Specifically, some lenders, such as ANZ and Westpac, rely heavily on credit scoring to make the decisions on their home loan applications. Whereas CBA, St George, and NAB tend to use a combination of scoring and manual credit assessment. They retain some ability to override a decision made by their system, however, they are still reluctant to use it.