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A credit report is held by a private company, called a credit reporting agency, and contains some of your personal and financial details. If you have applied for a loan in the last 5 years or if you have had a phone, gas or electricity service in your name, you are likely to have a credit report.

Contacting your lender or credit reporting agency to change your credit report

If the lender has an established industry external dispute scheme you can often get a good result if you make a written complaint to the lender. If the lender does not have an established industry external dispute scheme write to the credit reporting agency – Veda Advantage or Dun & Bradstreet and send a copy to the lender. Remember to date, sign and keep a copy of your letter.

If neither of the above resolves your dispute, you can complain to the Privacy Commissioner. Note that the Privacy Commissioner requires you to complain to the lender first.

Sample letters on how to write to your lender and/or credit reporting agency are available on the ‘Sample Letters’ page on the MoneyHelp website under ‘Tools & Tips’. For more information about getting a copy of your credit report please refer to MoneyHelp fact sheet titled ‘How do I get a copy of my credit report?’.

What do I need to check in my credit report?

• was the loan 60 days overdue at the time of listing?
• did the lender demand payment?
• is the amount of the debt correct?
• was the debt listed more than five years ago?
• did you have dealings with each lender listed?
• are any of the overdue accounts listed more than once?
• are you listed as a “clearout” when the lender knew how to contact you?
• was the debt more than six years old at the time it was listed?

When can defaults be listed on my credit report?

A default should only be listed on your report if:

• you were at least 60 days in arrears;
• the lender has made a written demand for payment;
• the lender notified you (at or before the time you entered into the agreement)that personal information would be given to a credit reporting agency;
• the lender warned you of its intention to list at the time it made its demand for payment; and
• the amount listed is limited to the amount which can be demonstrated to have been overdue for 60 days.

 

What is a clearout?

The term “clearout” is sometimes used on a credit report and refers to when a credit provider has unsuccessfully tried to contact you in writing and has reported you as a missing debtor.

A clearout listing remains on a report for seven years and it is likely that you will be unable to obtain more credit while the listing remains on your report, especially from any mainstream lender such as a bank.

A lender can only list a clearout if it is reasonable to believe that your actions indicate an intention to no longer pay the debt. However some lenders may make a clearout listing simply because you have changed address without providing contact details.

Examples of where the clearout listing might be considered to be unreasonable:

• if you have simply been on holiday and the lender could not contact you during this time; or
• if your last debt payment was a while ago, the debt has been sold and the new owner has only sent demands to your last known address.

What information from my credit report do lenders use in a credit assessment?

All information in your credit report can be used in a credit assessment, when lenders decide whether or not they will give you a loan. This information includes any changes of address, address, the suburb you live, the number of credit applications you have made, and the types of lenders to whom you have applied.

Therefore, it is important to ensure that all the information in your credit report is accurate, not just the information about payment defaults.

What rights do I have to correct mistakes in my credit report?

Under the Privacy Act 1988 you have the right to:

• obtain a free copy of your credit report (fees will only apply if you require the report in less 10 working days);
• obtain a correction of any incorrect information;
• have a dispute about a debt noted on your file;
• be informed by a lender that a loan refusal is due to details on your credit report; and
• know that only the credit reporting agency and lenders, including utilities, are accessing your file.

Who can put a listing on my report?

Only a business that allows you at least seven days to pay an account is allowed to list a default on your credit report.

Other businesses should not list failure to pay bills or debts. However all court judgments are listed on your report regardless of the type of debts or bills.

What about court judgments & bankruptcy information?

Credit reporting agencies obtain court judgment and bankruptcy information directly from the Courts and the Insolvency & Trustee Service Australia records.

If this information is incorrect, you will need to resolve the problem with the lender to have the Court and the Insolvency & Trustee Service Australia records changed before your credit report will be amended.

What if I have paid the debt or dispute the debt?

If you have paid a debt that has been listed on your report as a default, the lender is obliged to advise the credit reporting agency to have the listing noted as “paid”. However, default listings are not removed just because you pay the debt. Having “paid” noted on your credit report does not “fix” your report.

A lender might still refuse to lend to you because the default listing remains. Depending on the circumstances, the lender may agree to approve your application if the debt is paid.

If you have advised the lender that you dispute a debt that has been listed as a default, the lender is obliged to inform the credit reporting agency and this should be noted on your credit report. If you dispute a listing that comes from the public record, such as a judgment or bankruptcy, you would need to have the public record details changed (i.e. the judgment set aside before the information can be changed on your credit report).

Sources

Consumer Action Law Centre: How do I change my credit report (fact sheet)

The funding for this fact sheet was provided by the Victorian Property Fund and the Australian Government.

The information on this fact sheet is general and does not constitute legal advice.

MoneyHelp’s products and services have been prepared for the information of Victorians who are experiencing financial difficulty. Phone 1800 007 007 to speak to a MoneyHelp financial counsellor. A financial counsellor will discuss a range of debt payment options based on an individual’s circumstances.

© Copyright MoneyHelp and Consumer Action Law Centre

Last updated April 2011