What's in a credit report?
Your credit report can include information that is needed to identify you: name (including other names that you use); birth date; current and two previous addresses; current or last known employer’s name; driver’s licence number (if you have one).
Your credit report may also have information about your credit history – that is, how you’ve dealt with other debts. This is very important information as it tells the new credit provider how you’ve treated those debts, which gives an indication about how you’re likely to treat the new debt.
What’s included in your credit report can be a bit technical. To help you understand, we’ve set out an explanation below:
Repayment history information
This shows – on a month by month basis – whether you’ve made your loan payments on time. Other lenders will see a 24-month history of your payments (after 24 months, the information falls off your credit report).
If you’ve been up to date with your repayments and then miss one, a lender will only report that you missed the payment if you’re at least 14 days late. This means that if you forget to make the payment but catch up within a couple of days, your credit report will show that you’ve made the payment on time.
If you make your existing payments on time, when you apply for a new loan, the new lender will see that and it will help show that you’re likely to repay the new loan.
If you miss a payment this is unlikely to have much impact when you apply for a new loan (particularly if the new lender can see you've otherwise been making your payments on time).
If you’ve fallen behind by a few payments, or you miss payments on a number of loans, this may make the new lender worried that you won’t able to repay the new loan. But this can be improved by making sure you get back on track with your payments. Each month that you are able to make your payments on time will give a new lender more confidence that you’re going to be able to repay the new loan.
Only banks, credit unions and other types of finance companies are able to report or access repayment history information. Phone, gas and electricity providers are not able to report or access this information. This means that your credit report will not show whether or not you’ve paid your phone, gas or electricity bill on a month-by-month basis (but those businesses can report if you don’t pay for at least 60 days; see Default Information).
What will repayment history information look like?
Whether you’ve made your payments on time is represented by a number. A ‘0’ means that you made the payment on time (or, up to 14 days after it was due). A ‘1’ means that in that month you were one payment behind. A ‘2’ means that you were two payments behind and so on.
You’ll see a history of up to 24 months (depending on how long your account has been opened and when the lender started to report your payments).
If your credit report shows 24 ‘0s’ in a row, this means that you haven’t missed a payment over the last two years.
Check out the sample credit report to see what this will look like.
Consumer credit liability information
This refers to the basic information about the loans you’ve taken out and the things you’ve bought on credit. It includes information about the type of debt (e.g. a home loan or electricity account), the credit limit of the account (but not the actual balance of what you owe) and what type of payments you’re making (e.g. “principle and interest” or “interest only” payments).
When you apply for a new loan or to buy something on credit, credit providers can use this information to make sure they know how much debt you already have. This helps them to understand whether you can afford the new debt.
This information will stay on your credit report while the loan or account is open and for 2 years after it’s closed.
This shows the types of loans you’ve applied for, and the types of things you’ve tried to buy on credit, over the last 5 years. These will be shown whether or not you were actually approved for the loan, or whether you opened the loan once approved. For example, if you shop around for a credit card and make applications to three different banks, then your report will show three applications.
This can be important information for credit providers when you apply for a loan or credit. If there are a lot of applications on your report, the credit provider may worry that you are trying to get too many loans or buy too many things on credit (particularly if the applications are very recent).
This is a record that you haven’t met your repayments for quite a while. In fact, you have to have missed your payments by at least 60 days and the credit provider has to have made efforts to get the payments from you.
Having a default on your credit report is serious and will make it much harder for you to get a loan or buy things on credit for 5 years. After 5 years, the default will fall off your credit report.
If you have had a default listed, you can still improve your credit report a little bit by making sure the debt is paid or settled. If that happens, the credit provider has to update your credit report to say that the debt is no longer owed by you. Also, if you have other loans and are able to continue paying your repayments on time for those loans, that good repayment history information may help to reduce the impact of the default on your credit report and credit score.
However, it’s important to know that once a default has been correctly recorded on your credit report, it won’t come off for 5 years, even if you pay the debt owed.
There are rules that credit providers have to follow before listing a default (including sending you at least two written notifications about the debt and not listing any overdue payments less than $150 or that are statute barred).
If you think that a default has been listed on your credit report incorrectly, or if you think you don’t even owe the money being claimed, you can dispute the information with the credit reporting bodies.
Court proceedings information (i.e. court judgements)
Your credit report will show if a court has made a judgment against you in relation to any unpaid loans or credit to buy things. This will stay on your credit report for 5 years from the date the judgement was given.
This could happen if, for example, you don’t pay your credit card for a long time and the lender thinks the only way to get their money back is to take you to court. Another example is if you don’t pay your home loan and the lender goes to court to take possession of the house that was given as security.
Personal insolvency information (e.g. bankruptcy)
Your credit report will include information about your personal insolvency, including if you have gone bankrupt. However, it also includes other insolvency information such as debt agreements or personal insolvency agreements. These will stay on your credit report for at least 5 years.
Serious credit infringement
As suggested by the name, this type of information is very serious. It means that the credit provider thinks that you either obtained the credit on a fraudulent basis or are now trying to avoid paying back the money owed (this doesn’t apply if you want to pay back the debt but just don’t have the money).
A serious credit infringement will stay on your credit report for 7 years and, during that time, will make it very hard to get a loan or buy things on credit.
You can make sure a serious credit infringement isn’t recorded on your credit report by always letting your credit providers know your up-to-date contact information. If you’re having difficulty paying your loan, make sure you keep in regular contact with your credit providers.
Publicly available information
Your credit report may contain information from certain other sources – such as government authorities and the courts – if that information is ‘publicly available’ and relates to your credit worthiness.