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 can be 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?
The 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.
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: This will stop any future defaults from 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. This stays on your 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.
- Pay off your existing defaults: This is usually done by refinancing your home to roll your debts into one easy payment.
Please call us on 1300 889 743 or enquire online for more information.
How can I get a copy of my credit file?
There are several ways for you to get a copy of your credit file. 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 predominatly 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.
You can correct this 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 is important that your credit file contains accurate information otherwise future loan applications may be jeopardised.
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 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 provides 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.