Do you know how your credit file is? Did you even know you
had one? Most lending institutions; be it banks, or utility providers will view
your credit file to assist them in making a decision whether to lend to you or
open an account. Did you know that in a
recent survey conducted by Veda that around 80% of people have never even
accessed their own credit report. This is alarming and seems ridiculous
considering it’s free to do so.
As of March 2014 new laws will be introduced allowing more
detailed information to be included on your credit file. This extra information
can be backdated from December 2012.
Your credit file at present will show minor credit
infringements through to serious credit breaches. The report will show how many
times you have applied for credit, and if you have defaulted on any previous
credit / loan accounts. That information will remain on your file up to 5
years! A serious credit infringement or court action on your file can show that
information for 7 years. With the current system your loan must be overdue 60
days or more with an outstanding balance of no less than $100 to have a default
placed on your credit file.
So the new laws will allow reporting entities, (Credit
providers) to apply much more detailed information on you. I believe good and
bad. Some of the stored information accessible may be the type of accounts you
have, including the credit limit when it was opened and details of overdue
accounts. The changes will soon allow a credit provider to report if you have
fallen behind in single payments. This means you will not have as much grace as
you had previously.
Your credit file uses a scoring system and the more
enquiries you make or the more payments you miss will affect your credit score.
Now missing one payment may affect you adversely.
Veda is only one reporting agency. There are two currently
in Australia and soon possibly three. Dunn and Bradstreet is another agency and
what can add to frustration is the fact that they do not share information!
Constantly applying for finance won’t do you any favours either. So look before
you leap and make sure the deal suits you. The best advice is paying your bills
on time, don’t over commit and never bury your head in the sand. 7 years is a
long time.
The system is designed to give a clear picture for all
lenders / credit providers when processing an application. This can also be of
concern regarding how finicky some credit providers want to be. So now more
than ever is a good time to be on the right side of your credit provider and to
always be in contact if you think you may miss a payment.
To find more about your credit report go to
mycreditfile.com.au and check out Dunn & Bradstreet so you know where you
stand. Some information may not be accurate so checking out your credit file
can be a good way of seeing what’s going on and if you need to report incorrect
data. Web sites such as moneysmart.gov.au are a good way start trying to repair
a bad credit history. It has been reported that a large amount of credit
defaults are lodged by phone companies.
There have been some changes to the credit act also so all
lenders must be licenced. Never enter into an agreement with someone who is not
licenced.
We at SCM Beenleigh have been lending for over 12 years. We
have been proud of the fact that we will give you a fair go! We will stop short
of guaranteeing finance however we will usually overlook previous minor credit
issues. As long as you can display to us that you can afford a loan to start
with.
Steve Sharp
