Last updated 9 August 2016
Credit reports contain identifying and other credit-related information about people and businesses. The information can be obtained by a third party when a person applies for credit, while a person has credit obligations and when a credit provider is collecting overdue payments.
In Australia, private companies maintain credit reports. The major credit reporting bodies are:
Credit and utility providers must first obtain your consent in order to obtain information contained in a credit. They must also comply with the law regulating credit reporting.
Consumers need to make separate requests to each credit reporting agency to obtain information, and they can access a free copy of their report once every year.
The law that regulates credit reporting
Credit reporting is a very comprehensive system. The law governing credit reporting is found in pt IIIA of the Privacy Act 1988 (Cth) (Privacy Act) and the Privacy Regulations 2013 (Cth), and the Australian Privacy Principles are found in sch 1 of the Privacy Act.
A new Credit Reporting Privacy Code (Credit Reporting Code) applies to credit reporting agencies and those using the report.
For more information on these laws see the Office of the Australian Information Commissioner, the Australian Securities Investment Commission or CREDITSMART.ORG.AU, a website created by the association of credit reporting agencies.
Information kept on the credit report
A credit report can contain a person or business name, current and previous addresses, the employer and driver licence number. It also records credit applications including when enquires have been made by credit providers, whether the report was accessed, the type and amount of credit sought in an application, credit limits, the date accounts are opened and closed, and current utility contracts. The report can also contain repayment history information showing missed or late payments for some types of credit.
The Office of the Australian Information Commissioner publishes a comprehensive Table that summarises how long information is recorded on a credit report.
Default information is also recorded including business credit information, bankruptcy and court judgements, overdue payments and unpaid credit. A default must be overdue by 60 days or more and must be for an amount greater than $150. Defaults of under $150 cannot be listed.
In order for a default to be listed, the consumer must be sent:
- a Section 6Q Notice (Privacy Act) informing that a payment is overdue. This could be combined with a Section 88 Notice advising a default (overdue payment) under the National Credit Code
- a Section 21D(3) Notice (Privacy Act) advising that you are going to be default listed and informing how much has been outstanding for more than 60 days.
A listing can then be made 14 days after the Section 21D(3) Notice has been sent, but not later than three months from that notice.
Further notices and listings can be made for the same loan if further amounts become overdue by 60 days and are more than $150. If the loan is accelerated, the entire balance can be used for notices and subsequent listing.
Paying a debt listed on the credit report will only result in an update that the debt is now paid. It will not result in the listing being deleted. A listing will only be deleted if it should not have been made in the first place.
If a hardship request is underway
Unless the consumer has made the same request in the last four months, if they make a hardship request they cannot be default listed until 14 days have elapsed from notification of a hardship variation refusal (s 9.1 Credit Reporting Code). The consumer cannot be default listed while a dispute is with a financial services ombudsman.
Cannot list twice
The consumer cannot be default listed in relation to the total debt more than twice (once by lender) and otherwise by way of notification of court proceedings. The listing can be updated to reflect current amounts due (taking into account increase in the amount due or reduction because of payments).
Paying a debt will not remove a credit default, but it will be amended free of charge. It is unnecessary to employ a lawyer or a credit repair company. Find out more about credit repair companies as they may be expensive and not be able to do what they claim.
Fixing mistakes on your credit report
A consumer can make a correction request to the lender. The consumer is entitled to have the information amended or corrected and have this confirmed by the credit reporting agency.
The consumer is entitled to a copy of the information a lender has been given about the consumer’s credit report and the corrections (within 10 days).
The lender refers the request to the credit reporting agency, which must respond within a reasonable period of time and correct information within 30 days of the request or explain why it will not do so.
Lawyers or credit repairers are not required to do this.
Free help is available from financial counsellors, Legal Aid Queensland and community legal centres.
A credit reporting body can put a ban on the use or disclosure of your credit reporting information for 21 days from the request and you can ask for it to be extended.
Options of what to do if you think that someone has used your identity information are provided by Legal Aid Queensland.
Complaining about a credit provider
Consumers can complain about a credit provider and credit reporting bodies to the following ombudsman services:
- Financial Ombudsman Service or Credit and Investments Ombudsman Service—provide free financial industry dispute resolution for customers of members; considers disputes about financial planning, loans, leases, credit cards, banking, insurance, finance brokers
- Telecommunications Ombudsman Service—provides dispute resolution for telecommunications including assisting with hardship relief for consumers
- Energy and Water Ombudsman Service—considers disputes about electricity, gas and water accounts including failure by providers to offer hardship relief.