Brilliant Money Solutions | Tax Agent | Accountants | Business Advisors
Brilliant Money Solutions | Tax Agent | Accountants | Business Advisors
Brilliant Money Solutions | Tax Agent | Accountants | Business Advisors

Important Changes to your Credit Report



If you are like most people, your eyes will glaze over when words like "the Privacy Act" and "credit reporting changes" are mentioned.
While the subject can be as dry as toast, your credit report will play a vital role in your ability to own your own home, buy your dream car, or obtain a credit card to take on your overseas holiday... and suddenly it's not so boring anymore!

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"Your credit report will play a vital role in your ability to own your own home or buy your dream car.

So it is important you understand the new information that will appear on your credit report from March 12"



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A credit report is a file that records your applications for finance, any defaults, and your current credit relationships. Additionally, some credit reporting agencies may also include their own proprietary credit rating score as part of your credit report. All of this information is used by banks and financial service providers to help decide whether they will approve or decline your application for a loan or credit card.

From March 12, changes to privacy laws will impact your credit report and you need to know about them.

These changes will increase the amount of information licensed credit providers are able to share with each other via your credit report.

From March 12 2014, your credit report will show your monthly repayment conduct on your consumer credit - that is, whether you make your loan and credit card repayments on time, and if not, how late you are in making payment.

Additionally, from this date licensed credit providers can share information backdated as far as December 2012, and eventually your credit report will contain two full years worth of your repayment history.

Specifically:
· Repayment History Information (RHI) will include information about whether you have made payments on time or whether you have missed any payments.
· If you only pay part of the amount owing, you are taken to have missed a payment.
· RHI will include the day on which a payment is due, and if you made a payment after that day, the date on which it was paid.

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Are the changes good or bad?

That will depend entirely on your bill paying behaviour.

If you always pay your credit bills on time, then yes these changes could be good for you. Credit providers will be able to see your positive behaviour and assess your application for credit accordingly.

The new reporting system may also be beneficial to some people with credit problems, as it can now show you have worked to fix a default rather than just having the default recorded against you.

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On the other hand, if you regularly - or according to some commentators, have ever - made a late payment, you could be penalised by having credit denied or being required to pay higher interest rates to obtain credit.

Exactly how banks and financial service providers decide to use the new RHI remains to be seen.

It is important to remember that these changes apply only to licensed credit providers. Telecommunications and utility providers currently do not hold Australian Credit Licences and your history with them is NOT included in your credit report's RHI.

As well as including Repayment History Information, the changes to credit reporting also include:
1. The date on which a credit account was opened
2. The date on which a credit account was closed
3. The type of credit account opened
4. The current limit of each open credit account.

Licensed credit providers will be able to report your Repayment History Information back to December 2012, so if you do have some bad bill paying habits, unfortunately they may have already been recorded against you.

However, while the law allows for the new information to be recorded on your credit file, it is not mandatory for credit providers to do so. Some credit providers may immediately add information about you dating right back to December 2012, while others may do it slowly or not at all.

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It's Time To Get Into Good Habits
· It is important to check your credit report at least once a year for mistakes or unknown credit application requests, which can be a sign of identity theft. Start by requesting your credit report as part of your EOFY tax preparations.

You can order one free credit report a year, although you might feel like you have to jump through a few hoops to receive it.

You can get a copy of your credit report from these credit reporting agencies. Each agency may report different information so it is important to check all of them.

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Credit Reporting Agencies


Veda 1300 762 207

Check Your Credit (Dunn & Bradstreet) 1300 734 806

Experian Credit Report 1300 783 684

Tasmanian Collection Services (Tasmania only) 03 6213 5555


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If there are errors with regards to factual information - your name, birthday or address, for example - then contact the provider of your credit report to have it fixed.

  • If there is an error with your credit report itself, contact the credit provider (rather than the credit reporting agency) with whom the issue is to have it resolved. The recent changes make it the legal responsibility of the credit provider to resolve any issues with information they have added to your credit report, so they can't just tell you to take it up with the credit reporting agency.
  • If you are unable to resolve the issue to your satisfaction through the credit provider's dispute resolution process, you should contact the relevant ombudsman for help.
  • Avoid making multiple applications for credit over a short period of time. It is possible each application will show up on your file. Lenders may question the need for so many applications and may decline you on that basis.
  • To maintain a clean credit report going forward, ensure you always pay your consumer credit bills on time. Technology can help here - use an app or a calendar to schedule reminders.
  • If you do experience financial hardship and are unable to make a repayment, always contact your credit provider before the repayment is due to discuss the situation with them.
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    For more information, visit the credit reports section of moneysmart.gov.au




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