YOUR CREDIT FILE - COMMONLY ASKED QUESTIONS
What is a credit file?
A credit file is a set of information which relates to your credit history.
A credit file is updated every time a person or commercial entity applies for new credit. The information is one of the factors that impacts on your credit-worthiness. Banks, retailers and credit providers use the data, along with the information you provide to them, to determine whether to lend you money or not.
This makes it crucial for borrowers to keep a watching brief on their file. If there are any inaccuracies on a credit file, it may delay your application for credit while those inaccuracies are investigated and corrected. Veda Advantage therefore recommends that anyone applying for credit checks their credit file at least 30 days prior to making a credit application.
Who has a credit file?
Files are kept for people and businesses which have been credit-active during the past seven years.
What sorts of things would you find on a credit file?
Credit files include information on the items necessary to identify you as well as information of relevance for credit assessment purposes, such as:
- personal details (name, address, sex, date of birth, drivers licence number)
- overdue accounts
- bankruptcy details
- court judgements
- details of directorships or proprietorships.
Other details include: when credit was applied for, in whose name it was sought, from what body or institution, the amount sought and the type and purpose of the credit sought.
Who can access my credit file?
No credit provider is allowed to access a consumer credit file without the permission of the applicable individual. Veda Advantage records information on credit files under the strict regulations of the Federal Privacy Act 1988.
How can I find out more / access a copy of my credit file?
A simple way to obtain a copy of your personal file is by applying on-line at www.mycreditfile.com.au. The cost for an express service is $27.00 (including GST). A copy will be sent by email, post or fax within one working day of a request being received. If you have a little more time to spare then choose the free service and a copy of your credit file will be dispatched to you within ten working days free of charge. Please note that you may only request a copy of your own credit history. For security purposes, prior to receiving a credit file you will be asked to verify your identity. You can obtain more detailed information regarding the access and use of personal information on our privacy page.
Free requests can be made by mail or fax:
Veda Advantage Public Access
PO Box 964
North Sydney NSW 2059
Fax: (02) 9951 7880
How does data get placed on an individual's credit file?
Veda Advantage receives information from a range of lending institutions - banks, telecommunications companies, power providers etc on credit applicants / credit applications. We are notified electronically when someone puts in an application for credit with a bank or lending institution that uses our services.
We are also notified of defaults by the organisations that use our services.
How long does it take for a default to be registered on my credit file?
The general rule of thumb is Veda does not receive information about a credit default any earlier than 60 days or around two months after a final payment notice was issued by the lender. This aligns with the industry standard recommended by the Australian Retail Credit Council (ARCC). Most lenders issue a series of written reminders and warnings before a final notice is sent - so generally, there are many months in between the time a first bill may have been sent to the time a default is actually lodged on a person's credit file. Lenders also have a certain amount of discretion to extend that timeframe further.
How long is data kept on my file?
- Credit applications, enquiries and overdue accounts are held on your file for five years
- Bankruptcy information is held on your file for seven years
- Clearout information is held for seven years
- Court Judgments are held for five years
- Writs & Summons are held on file for four years
- Identity information, which includes name, date of birth, sex, driver's license, address history, and cross-reference names (if any) are held for the life of the credit file. This information is used to distinguish the credit file from others held in the database
- Purge dates are calculated on the date the information was added to the file, and are based on the time limits provided in the Privacy Act 1988
NB: Even when an overdue account or clearout has been brought up to date or paid in full, it will not be removed from your file. All overdue account listings remain on file for five years from the date of listing. All clearout listings remain on file for seven years. The fact that an account has become overdue, and then been paid becomes part of your credit history.
How can you protect your credit file from bad references? The key issue is make sure you pay your bills on time, and if you can't we strongly recommend you contact the organisation you owe money to as soon as possible. It's also important to check your credit record regularly and let us know if you think there is anything on there that is inaccurate.
What sorts of things can lead to being rejected for credit?
There are a number of reasons why a credit provider might refuse an application for credit and lenders set their own criteria. A first step is to check your credit file to identify any problems, which might include:
- An overdue account(s), known as defaults
- Incorrect information on the file
- Someone is using your identity to illegally obtain credit and has defaulted on the payments.
What can you do if you have a negative record on your credit file?
If you believe there is an error on your Veda Advantage file, let Vda know. Veda take their responsibility as custodians of that data very seriously, so there is a fairly stringent process for removing something from a record - but it can only be done with the right kind of evidence.
General tips for keeping your credit file clean:
- Pay future bills on time, or carefully consider your credit commitments
- Do contact the organisation you owe money to if you are having trouble paying - many organisations are willing to set up a reasonable payment extension system if you talk to them about your situation. It is often the failure to respond to a bill or notify a business of your intention to pay that causes them to proceed to default stage.
- Don't make a credit application lightly - "shopping around" for credit can reflect badly on your credit history because it can indicate to a financial institution that you are potentially being rejected in your other credit applications. And that may lead them to treat you more cautiously. Current legislation in place means we can't show money or credit lenders whether or not an application was successful - all they can see are the number of applications.
- If you think you may have problems paying a mobile phone bill, you should investigate things like pre-paid services.
- It's important to keep your address and other details accurate and up to date: If you have moved and haven't notified one of your credit providers about that then they may be sending your notices to the wrong address. It's the individuals' responsibility to provide those details to their financial institutions and suppliers etc
- Do check your file - if you think something may be inaccurate, let Veda know and they can help you sort it out.
- Consider a credit alert system - so you are across any changes to your file. That allows you to save valuable time sorting out anything that might be problematic such as fraudulent use of your identity.
- Don't try to cheat the system when applying for credit - the credit checks are in place for a reason - don't over extend yourself in the credit area, and don't give false or misleading information in a credit application, it may cause difficulties later on.
WHAT TO DO IF YOU ARE DECLINED CREDIT
What do I do if the information on my credit file is incorrect or needs to be updated?
There are a number of situations that you may wish to rectify:
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Overdue Account Details
If you have an Overdue Account (Default) on your file that has been paid but has not been updated, then contact the credit provider listed and ask the credit provider to contact Veda Advantage. Your file will be updated within five 5 days of the credit provider notifying us that the account is paid. Should you discover an Overdue Account (Default) on your file which is not yours (you may not recall having an account with that company) please contact the credit provider and give them the account number on your credit file so they can investigate the matter for you. If the credit provider confirms that the account is not yours, they will inform us so that we can remove it from your file. -
Consumers should be also aware that:
Credit providers have individual criteria for deciding who to lend to. Refusal may occur even if overdue accounts, court judgements or bankruptcy information on a file show that they have been finalised.
What to do if you have an overdue account (default) on your file
Where an overdue account showing on your file has been paid but not updated, call the credit provider and request they contact Veda Advantage to make the correction. Your file will be updated within five days of the credit provider notifying Veda Advantage that the account is paid.
Where an overdue account is showing that is not yours call the credit provider and give them the applicable account number so they can investigate. If justified, the credit provider will then inform Veda Advantage and the incorrect data will be removed.
In cases where you are disputing an overdue account with a credit provider, full details of the dispute can be forwarded to Veda's Investigations Department. This action allows for the entry on the credit file to be marked "disputed" until the matter is resolved.
Maintaining credit worthiness
The following steps are recommended:
- Pay your bills on time
- Call your credit provider(s) in a timely manner and alert them if there is a problem meeting your commitments
- Review your credit file to make sure there are no errors in the information and/or discover any overdue accounts that have been forgotten about.
- Monitor your credit file to ensure someone is not fraudulently using your identity (a growing problem worldwide)
- A "no" to a credit application, or the supply of goods and services where payment is deferred, does not necessarily mean your credit file is flawed. Credit providers each have their own lending criteria, so seek an explanation
- Remember that the details of overdue accounts listed as a payment default, even when paid, remain on your file for five years from the date of listing, as part of your credit history.
- Overdue accounts where the debtor has been "confirmed missing" remain on the database for seven years.
About Veda Advantage
What Veda does - and why it's important. Veda exists to protect the interests of the lending institutions - from large banks to small to medium size businesses who need to find out whether the person they are extending credit to actually exists. They also protect the interests of the individual by trying to ensure the integrity of the data on a file (identity fraud etc)
The truth is, it does matter if you don't pay a bill - most people grew up with the understanding that you need to pay for things and a promise to pay is a promise to pay. And most organisations that agree to extending credit make it clear to their customer what the terms of that loan are. It's important people remember whether it's the small business owner around the corner, or your credit card service people do expect to be paid.
Its not just the big items like the mortgage payments or the credit card - all sorts of bills can end up compromising your credit history including gas and electricity.
Unfortunately, people sometimes only know about their credit file, or Veda Advantage when they have a problem getting credit - Veda are actually there to provide a secure system for everyone. They want to see a greater degree of financial literacy and understanding out there regarding managing your credit history.
Organisations set their own approval standards and criteria for credit approvals - and they tell Veda what sort of information they are seeking. There may be differences between particular credit card companies, banks or car loan companies. That is the responsibility of the organisation.
There are powerful privacy regulations in place - and everyone agrees to their credit history being accessed when they apply for credit. Veda is a careful custodian of that data. They exist to provide the right kind of protection for businesses - and also for members of the public. For example, they can help protect the public from fraud or false identity.
Current legislation in place means Veda can't show money or credit lenders whether or not an application was successful - all they can see are the number of applications.
Things have changed - and there are far more different types of credit available now. Even supermarkets are providing credit cards.
This message is particularly important for young people who have access to credit via mobile telephones etc - you need to take your financial commitments seriously to make sure you don't create difficulties down the track when you are interested in a bigger loan for a car or a holiday. Parents - help your children to understand their commitments.
One of the limitations with the current negative credit reporting system is that it only records your defaults and applications, not the payments you've made on time - that's why Veda Advantage is pushing for a comprehensive reporting system that takes this into account.
Veda Advantage is no longer involved in debt collection, but they are aware that there are many steps down the path before something is registered as a default. Again, they don't set the criteria for chasing a payment - that's up to the individual companies - but they are aware that many organisations respond quite favourably to someone contacting them if they have an outstanding bill and making an agreement as to how they will pay that bill.