How can I change my credit report?
How can I change my credit report?
- It is important to ensure all information on your credit report is accurate – not just payment defaults
- Only businesses that allow you at least seven days to pay may list a default on your credit report
- You can seek to change mistakes on your credit report by writing to the lender and/or credit reporting agency
- Be wary of ‘credit repair’, ‘credit fix’ or ‘debt solution’ companies that say they can ‘improve’ your credit report. They usually charge large fees for services you can do for free.
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.
What rights do I have to correct mistakes in my credit report?
Credit reporting agencies are required by the law to make sure information on credit reports is accurate, up to date and complete. If there is something incorrect on your credit report you have a right to ask for it to be corrected. It does not cost any money to have incorrect information corrected.
Under the Privacy Act 1988 you have the right to:
- obtain a free copy of your credit report at least once every 12 months (fees will only apply if you require the report in less 10 working days);
- obtain a correction of any incorrect information; and
- be informed by a lender that a loan refusal is due to details on your credit report.
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.
Contacting your lender or credit reporting agency to change your credit report
If there is information on your credit report which is incorrect, out of date or incomplete:
Write to the credit reporting agency that produced the credit report or the lender who reported the incorrect information. Tell them what information is wrong and how you want them to fix it.
– If you send your letter to the credit reporting agency, also send a copy to the lender.
– Also keep a copy of the letter for your own records.
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 ‘Credit reporting – getting a free copy of your credit report?‘.
You can only change your credit report if information on it is incorrect. You cannot ‘clean’ or ‘fix’ a credit report to remove information if that information is correct.
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 about court judgments and bankruptcy information?
Credit reporting agencies obtain court judgment and bankruptcy information directly from the Courts and the Australian Financial Security Authority records.
If this information is incorrect, you will need to resolve the problem with the lender to have the Court and the Australian Financial Security Authority 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).
Consumer Action Law Centre: How do I change my credit report?
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 2016