Your credit profile and history is one of your most important assets and it is important to be aware of any changes made to your file. These changes can impact on your ability to obtain future loans as well as increase your chances of becoming a victim of identity theft.
As your credit profile comprises a credit score and credit report generated using data from your credit history, it’s important to keep track of changes to your credit report and credit score, because that way you can potentially improve how you’re perceived by lenders. This is particularly vital if you’re planning to apply for a large form of credit soon, such as a home loan.
Your credit history, profile and score are used by companies who potentially intend to lend you money or provide you a service. They access the information on your file to determine your credit worthiness.
So, what does your credit profile contain?
It contains: full name, date of birth, driver’s licence, gender, residential addresses, employer information, loan enquiries and any defaults.
To explain this in more detail:
Your consumer credit information may include:
- Any credit enquiries that you have applied for in the last five years, whether you have proceeded or not, for example, loan or utility company or otherwise, e.g. mobile phone plan or electricity.
- Any current loans you have with credit providers (e.g. a credit card, home loan etc.) and details of overdue consumer accounts.
These overdue accounts can be recorded as:
Payment default – an account of $150 or more that is 60 days or more overdue. It can only be recorded on your file, if the credit provider has tried to contact you, such as via a written invoice. By law, your file should also be updated as soon as practical once you have paid the overdue amount. But these defaults can stay on your file for five years, even when you have paid the default.
Clear outs – also known as ‘confirmed missing debtor’. This is when the person who owes the money cannot be located, however, the credit provider must make a reasonable attempt to contact you. Clear outs remain on your file for seven years, even after you have paid the account.
Just from these examples you can see the importance of paying your bills and loans on time, as otherwise they remain as a record on your credit file for many years to come.
Public record information such as:
- court judgements and court writs
- directorship details
- proprietorship details
- bankruptcy information
Many people do not realise that each time you apply for a loan whether in person or online, it places an enquiry on your credit file. A large number of enquiries may impact a lender’s decision to approve any future loans you are applying for.
How can you keep on top of your credit file?
You can request a FREE copy of your file or sign up for a fee to receive alerts to allow you to monitor any changes on your credit file. So do an online search as there are a number of different firms who provide this service.
Changes to your credit profile could also indicate that incorrect information has been entered, in which case you’ll be alerted quickly and be able to act. Being aware of enquiries can also protect you against identity theft.
So, what are the next steps if you are considering taking out a loan – even if you are credit impaired?
Call our office on 1300 888 299 and talk to one of our Brokers about your current lending requirements, credit history, income and asset position. From a panel of 30+ lenders they’ll narrow down the top fits for your current financial situation.