What do you know about your credit file?

Whether you are signing up for a mobile phone plan, a business loan or a mortgage, your approval can come down to one thing: your credit history.

But most Australians have never checked their credit history, nor do they have a clue how to do so.

Recent research by credit reporting agency Veda found that 80 percent of people have never checked their credit history, while 93 percent don’t know how to access their credit record.

This record of your financial behaviour is collected into a “credit report” by credit reporting agencies, and lenders access it to decide whether to approve your loan or credit application. If you have applied for a credit card, a loan or even a mobile phone plan in the past five years, all that information – including your punctuality in making repayments – is listed in your credit report.

What can go wrong?

Staying on top of all your bills and paying on time is the only way to ensure a problem-free credit history. On the other hand, if you are consistently late in paying bills, you will end up with a poor credit report.

Any bills that are not paid 60 days after the due date are recorded on your credit report and remain listed for five years – this is frowned upon by lenders and other companies, and will affect your chances of being approved for loans or credit in the future.

Check your record

You can request a copy of your credit record from the credit reporting agencies, such as Veda, Experian Credit Report or CheckYourCredit.com.au. You will need to provide your full name, current and previous address, date of birth and driver’s licence number. It generally takes 10 days to receive the report.

There have been cases of incorrect negative listings on credit reports so if you find a mistake, you can take steps to correct the problem.

Tips for a spotless credit history

• Pay bills on time: you can improve your credit record by using credit more often and paying the bills on time, so that the on-time payments outweigh any indiscretions.
• Set up a direct debit with your bank so that your credit card and other bills are paid in full before the due date.
• Clear up any disputed records: your credit report includes instances when a lender or credit provider unsuccessfully tried to contact you and reported you as a missing debtor.

Compare credit cards