Frequently asked credit questions
Q: What if I think someone is impersonating me? How do I protect myself against ‘identity theft’
A: Identity theft is when someone pretends to be you in order to fraudulently borrow money from a lender or buy something on credit from a business. It often happens when someone steals your personal information. This could happen through someone stealing your mail from your letterbox or if you’re pickpocketed (especially if your passport is taken while you’re on holiday!). It could also happen if your personal information is stolen electronically (e.g. by ‘phishing’ or if you put too much personal information on your Facebook profile).
It can be a total pain if it happens to you. Often, the first indication that something is wrong is when you apply for a loan and get refused because there’s a default listed on the loan taken out by the fraudster.
However, there are things that you can do to limit the pain.
Firstly, talk to your local police station as they’ll want to take a report of the crime. Make sure you get a copy of the police report as it will help you deal with any credit providers that think they loaned money to you.
Secondly, contact each of the credit reporting bodies and ask for a ‘ban’ to be put on your credit report. This is free to do and means that any credit provider that tries to get a copy of your credit report (e.g. because the fraudster has applied for credit in your name) will be told that a ban is in place. This will signal to the lender that they shouldn’t approve the loan. The ban will stay on your report for 21 days, but can be extended by you.
If you (i.e. the real you) make an application while the ban is on your report, the credit provider can access your credit report with express written permission from you (although check with your credit provider to see what they do in these circumstances as some credit providers may prefer to wait until the ban is over before assessing your application).
Q: I always pay my bills on time. What is the benefit for me?
A: It depends. If the bill is for a financial product, such as a home loan, personal loan or credit card, and the credit provider has chosen to report repayment history information about their customers, your good payment conduct will appear on your credit report and may be available to some other credit providers to see. This could mean that you get better access to credit in the future – possibly even lower interest rates.
However, not all credit providers can or will report this information, or some may take a while before they chose to report this information, so your good payment conduct will not always appear on your credit report. Over time, however, more and more credit providers will be reporting this information.
Q: Are all credit providers collecting repayment history information on how customers are paying bills?
A: All credit providers record and monitor how their borrowers pay back debt. They do this for their own use. However, only some credit providers will share this information with credit reporting bodies to list on your credit report. If your credit provider is one that shares your repayment history with a credit reporting body, your good history with that credit provider can then be used by other credit providers when assessing a loan application. This should give you more choices when you want to borrow money. However, it’s important to remember that other credit providers may see if you haven’t been paying your payments regularly. Check out our tips on keeping your credit report healthy. Struggling with your repayments? We’ve set out some things you can do to protect your credit report here .
In order to share this information, the credit provider must be licensed by the Australian Securities and Investments Commission, the national credit regulator (e.g. a bank, credit union or finance company).