Understanding credit reports
Many consumers you deal with may know little or nothing about credit reports. Here is the basic information a consumer needs to know:
A credit report is prepared by a credit reporting body at the request of a consumer, or at the request of a credit provider when a consumer applies for credit. Credit reports contain details about a consumer’s credit history, including whether they are, or have been, bankrupt, if there have been court judgements against them and certain other things, such as information about their current credit accounts and repayments.
Generally, when a consumer applies for credit, the credit provider may obtain a credit report and use the information in the report to help work out whether the consumer can afford to repay the loan and also whether they are likely to repay it.
The information included in a credit report may seem confusing. To help you explain a credit report to a consumer we have created a sample report, together with explanatory notes, which you can use to understand the key features of a credit report and what information consumers should be aware of when they look at their credit report.
The following types of information are allowed to be included in a credit report (as per Part IIIA of the Privacy Act):
- Identification information: such as name, date of birth, and address
- Account information: information about credit accounts the consumer holds and which institutions they are held at. Credit Providers are permitted to report the type of account, credit limit, date opened, date closed (if applicable), type of account and other information about the terms and conditions of the account.
- Credit conduct information: such as the consumer’s repayment history as well as any defaults, court judgements relating to credit, bankruptcies and certain other personal insolvency information.
The consumer’s repayment history will show whether their monthly repayments have been paid on time over the past two years. This information will only be reported for accounts held with credit providers that hold an Australian Credit Licence (e.g. banks, credit unions and finance companies). It will not show repayment history for accounts with other types of credit providers, such as mobile phone companies and utilities providers.
The following information will not appear on the consumer’s credit report:
- religious or philosophical beliefs
- health information
- genetic information
- racial or ethnic origins
- political opinions
- sexual orientation
- membership of professional associations or trade unions
- criminal record
- credit account balances
Getting a FREE credit report
Consumers may ask how they can get a copy of their credit report, what their rights are regarding access to their report and when they are entitled to obtain a free copy. The first key message for a consumer is that they might have credit reports with more than one credit reporting body, and each report might contain different information.
When applying for credit, a consumer can ask their credit provider to tell them which credit reporting body or bodies they supply their information to.
If you work for a credit provider, you should check that you know which credit reporting bodies you deal with.
Consumers are entitled to one free credit report every three months, from each credit reporting agency. They can also get another credit report without charge from the credit reporting body if they show that a request for credit has been refused in the last 90 days. The consumer is also entitled to a free credit report if there has been a correction made to their credit report.
If the consumer isn’t entitled to a free copy of their report, the fee charged by the credit reporting body mustn’t be ‘excessive’.
The credit reporting body must provide the copy of the credit report – whether provided for free or for a charge - within 10 days of a consumer’s request.
When a consumer wants to obtain their credit report, they should be mindful that they will need to provide sufficient information which identifies them. This may include a driver’s licence, passport or birth certificate, as well as their address and contact details. They may also be asked to provide details of their current or previous employer, or organisations they have previously applied to for credit (although such information may be optional).
The purpose of this information is to confirm that the person requesting the credit report is who they say they are and is entitled to receive this information – a key privacy protection requirement.
In addition to obtaining a free copy of their credit report, some credit reporting bodies may give consumers the option to subscribe to receive regular updates and access to their credit reports. This service is often available for a fee. This has the added benefit of alerting a consumer to changes that may occur on their profile. For example, when a credit provider does a credit check for a new credit application which may alert a consumer to potential identity fraud if they had not applied for the credit themselves.
Credit reporting bodies
Below are the names and contact details of the main credit reporting bodies in Australia. The first three credit reporting bodies listed cover all states. Consumers who live in Tasmania should also check with the Tasmanian Collection Service.