The first thing people do when they want to perform a credit check is turn to the internet for the facts. The problem with turning to the internet is that often people get incorrect advice on their credit rating and why there is a default listed on their credit report.
This solves nothing and often leaves people confused as to the multitude of reasons as to why they may have a tarnished credit report.
Here are the facts you need to know about your credit report to ascertain how you can fix them and what caused the bad credit rating.
Before a credit default can be listed on your credit file
The law states that you must be informed in writing by your credit provider before they place a credit default on your credit report. This means they actually have to send you a proper letter containing the reason and why they intend to put a default on your notice.
Often people will claim they never received the letter, though this is a catch 22. Often people change addresses and in turn do not receive their mail. This can be why the people begin to default as is, let alone receive a letter of warning. Keep your address details current with all credit providers to ensure constant contact can never be broken.
How do I repair my bad credit rating on my credit file?
You have a few options when it comes to attempting to repair your credit report.
If you believe the default on your credit history is incorrect, you are able to request a copy of your credit file from a credit history provider (listed below shortly) and ask them to request further information about the default from the original credit lender. From there you will be able to dispute the default with the person who gave it to you, requiring that you provide proof you either paid the debt or that a mistake was made on the credit lenders side.
If the credit default is proved to be incorrect, it will be wiped from your file and no history of your bad credit rating will remain.
How do I perform a credit check?
Firstly, you are entitled to access your credit report for FREE. There are two main credit reporting agencies in Australia, both of which attempt to charge you a small fee to expedite the processing of your credit report. This is a fee to hurry the process, when actually there is a FREE version available it just takes longer to be delivered (10 working days).
The two main providers are:
Veda Advantage requires that you provide an application in writing accompanied by photo ID documentation. Alternatively you can pay to have the credit report delivered sooner for $36.35.
www.vedaadvantage.com.au or www.mycreditfile.com.au
Dun & Bradstreet
Allows you to also acquire your credit report online within 10 working days, though charges $30 for a fast access to your credit report.
www.dnbcreditreport.com.au or www.dnb.com.au
What does my credit report contain?
It provides you with details around who has accessed your credit file (such as any lenders or telcos), any bad credit defaults you have along with details around your identification, bankruptcy claims, summonses, overdue payments and any judgements made against you in the past.
Every time you apply for a credit card online or otherwise, the bank will look up your file. Regardless of whether you go ahead with the card or not, it will remain on your file that the bank looked at you. This can make it difficult what applying for a loan later as they will question the multiple look ups and request further information in the concern that other banks rejected you for some reason.
Does a late video rental effect your credit rating?
The answer is a firm no. Contrary to what people believe, a late video return doesn’t affect your credit file. Only registered credit providers are able to put forward default claims against your files. This means banks, lenders, telcos, etc. A phone bill that is over 2 months late can affect your rating also.
Not paying rent will not affect your credit rating either –your landlord isn’t a registered credit provider so in turn there is no possibility for a bad credit rating.
How can I protect my credit history?
Check it regularly. Request a credit check from one of the providers above for free every single year. You never know what might make its way onto your credit report so the sooner you can disprove it the better.
Who is able to access my credit report?
People who can access your credit file must be registered credit providers. This could mean banks, telcos, mortgage insurance agencies and of course the police.
You should be advised before someone looks at your credit report, though this is often done in the small print of the disclaimer on any application.