IN THIS GUIDE
What is a credit report?
A credit report is a comprehensive record of your credit history and overall creditworthiness.
The Office of the Australian Information Commissioner defines a credit report as “a document a credit reporting body produces using your information supplied by credit providers and other sources.”. If you’ve ever applied for a credit card or loan, an associated inquiry will be listed on your credit report.
Being proactive and checking your credit report allows you to know what lenders see, giving you the chance to strengthen your credit rating before it’s reviewed for a future loan.
What does a credit report show?
A credit report includes the following:
- Personal information (name, date of birth, address, and employer).
- Consumer credit liability information.
- Any credit products you have.
- Repayment history for each product.
- Defaults and infringements.
- Credit applications and enquiries.
- Commercial credit information.
- Public record information.
- Credit report requests (number, frequency, and who else has seen the report).
In some cases, the report may detail instances where repayments were honoured, such as defaults, court cases or bankruptcies.
Credit report vs. credit score and credit rating
The terms ‘credit rating’, ‘credit score’ and ‘credit report’ are often used interchangeably, but they aren’t the same.
- A credit report is a historical record of a person’s credit history.
- A credit score is a number based on personal and financial information detailed in the report.
- A credit rating is the ‘band’, or range, that a credit score falls under.
Simply put, a credit report is the precursor to a credit score and reflects the reputation of the borrower. Accordingly, credit scores and ratings change as a credit report is updated.
Credit reporting bureaus in Australia
Australia has three major credit bureaus, or credit reporting agencies, responsible for collecting the information on your credit report: Equifax, Experian and illion.
Each operates independently and receives information from various lenders and public sources, so what you see on your credit report may vary by agency.
What is Comprehensive Credit Reporting?
In 2018-2019, Comprehensive Credit Reporting (CCR) came into effect, requiring the big four banks — Westpac, NAB, Commonwealth Bank and ANZ — to participate fully in the credit reporting system. This inclusion gave lenders more insights when assessing a borrower’s true credit standing and ability to pay a loan.
Lenders became privy to customers’ credit data, both negative and positive, and received more specific details about credit accounts — when it was opened or closed, the credit type, and any limits.
According to Money magazine, approximately 95% of consumer credit accounts have comprehensive reporting. Nearly 60 financial institutions report data to credit reporting agencies.
While this might seem daunting, it’s a win-win for both lenders and borrowers. You can only be approved for credit if your track record indicates you can handle it.
How to get a free credit report
Fortunately, discovering your ‘creditworthiness’ is relatively straightforward. The Government website MoneySmart, recommends requesting a credit report once a year. However, you’re eligible to get a free copy every three months and should make sure to receive
To request a free copy of your credit report, contact the credit reporting agency:
The waiting period for a credit report is between two to 10 days. Be sure to only request copies from Australia’s three major credit reporting agencies and be wary of any provider who tries to charge you for a report or asks for your credit card details.
Regularly reviewing your credit report is a smart financial practice. It’ll help you stay on track and put you in the best position to access future credit with a competitive interest rate. It’s also a good opportunity to check for errors and challenge them, if necessary, by contacting the credit agency that issued your report.
Simple steps for building credit
Credit allows you to borrow money with the promise you’ll repay it in the future. With good credit, it’s easier to buy a car or get approved for a rental property. Plus, with a good credit score, you can even save money with lower interest rates or waived fees.
If you’re building your credit history from scratch, consider these first steps to improve your credit score.
Use your credit
It’s a paradox, we know. There’s a myth that the best financial standing is one without credit, but this isn’t necessarily true. Credit is there for you to use it, so don’t be afraid to tap into it by applying for a starter credit card or becoming an authorised user on a family member’s account.
Remember, you automatically impact your credit every time you take out a loan or use a credit card, so make sure you do so strategically. Only apply for one account at a time and always pay your bills in full and on time.
Consider your credit mix
Not all credit is equal. Credit agencies advise having a combination of different credit types to prove you can handle repayments.
Two important types to consider are revolving and instalment credit.
- Revolving credit, as the name suggests, doesn’t have a final repayment date. For example, a credit card.
- Instalment credit, on the other hand, has a set loan amount and repayment timeline, such as a car loan.
While a credit mix isn’t the only way to get a higher rating, it can show more diversity in your credit history, which can give lenders more confidence. Ultimately, the best credit mix is what you’re comfortable managing.
Face your financial fears
Credit isn’t innately ‘bad’. Credit, when used appropriately, can help you achieve your life dreams by making it easier to start a business, travel the world, and buy a house.
So, while the thought of finding out your credit score may give you a pang of anxiety, don’t let this fear hold you back. Knowing your credit rating gives you the power to see what lenders see and make any necessary financial and lifestyle changes to get into the green — and stay there.
You’ll thank yourself the next time you go for a loan, mobile phone, new car, home or line of credit.