So, you can’t pay that $5,000 on your credit card. Or you’ve missed your mortgage payment for the third time in three months. How long will it haunt your credit record? The official answer is five years – seven if you’re a bankrupt.
Most people worry about these black marks hanging around forever. The truth is that payment defaults stay on your credit file for five years and then the slate is automatically wiped clean.
Bankruptcy is only listed for seven years but the credit ramifications are enormous – your name is forever on the public record with the Insolvency and Trustee Service Australia and your ability to borrow money or buy things on credit will be severely limited.
Credit records provide lenders with a look at your credit history – including loan defaults, applications for credit, court judgements and serious credit infringements – to give them an idea of your ability to repay.
Identity Fraud costs the community $2.2 billion a year. Read more about avoiding being a target of fraud. In its simplest form, an individual’s personal details are “stolen” and used to gain credit – either cash or goods and services.
The upshot is that the individual is left with a potential liability for the debt, a damaged credit reputation and the inconvenience of amending a corrupted credit file.
Protection is the best deterrent, so make sure you know what is on your credit file by requesting a free copy from Veda Advantage.
Make sure you follow the instructions which say “Free service” because the first few options on the request your credit file page are “so called” premium services that will post you a copy in 1 day if you pay them a fee compared to posting you a FREE copy in 10 days.
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.
To obtain your file you will need to provide the credit agency with:
- A clear statement that you are requesting a copy of “My Credit File”
- Your full name
- Your date of birth
- Your driver’s licence number
- Your current residential address
- Your previous addresses
- Your current employer or a previous employer
- Name of the organisation to which you last applied for credit
- A daytime telephone number
- Your signature.
If for whatever reason Veda Advantage doesn’t have your full credit history you can also request a free copy of your credit record from Dun & Bradstreet
{ 39 comments… read them below or add one }
i just read yr article on credit default history. the bank told me that the default stays against my name til paid, then after the 5yrs its wiped. i have these debts due to credit fraud. someone stole my id. she paid debts in my name with stolen cards.
excerpt from news.com.au article “Young in debt over mobiles, cards”
Although it is very easy to rack up huge debts on a mobile phone or credit card with today’s easy access to debt, there are ways to avoid these financially painful habits eg:
* I usually use SMS rather than calling people from my mobile. If I have to have a long conversation I’ll do so when I can call the person’s landline number or i’ll only call from my mobile for less than a minute.
* I only have 1 credit card, always pay it off every month and have never had to roll over the credit card balance onto other cards because of mounting interest bills.
I declared bankrupcy in August 2002. I will receive my Superannuation payout in 2008 (May) Would any company consider granting me a loan even if it is after 7 years? i have no other debts
Thank you
Deborah
I have heard that if you pay off the debt that caused the black mark before the 5yrs, your name gets cleared. Is this true or will it still stay with you until the 5yrs are up?
Cheers
Tracey
EDITOR: I’m not sure. The best place to find out is eg: Victorian Consumer Affairs department or the Fair Trading department in NSW or a not-for-profit non government organisation like the Consumer Credit Legal Centre (NSW) Inc
Excerpt from Sun Herald artice “How to keep your credit record clean”
I have been told I have bad credit history. The thing is, I had a court judgement made against me by one of the insurance companys for a car accident, at the time I could not pay all the insurance companys. Later I was able to pay them all some of what I owed them, and they all accepted the agreed amount. I have payed them and I asked the insurance company if they could get my credit history repaired, they said they would once they received the bank check, well that was one and a half years ago,now we find out we have a bad credit history. How can we fix it?
Thanking you
ADAM KENNY
Once I thought it’s stupid to look at your credit report every other months. But since you can have your identity stolen any time… I came across an article about identity theft security measures and was impressed by the facts they say. My conclusion – you either have no credit history or take additional job to pay for credit protection services
EDITOR: Checking the record every few months is a bit overkill. Anyway in Australia you can ask for your record once year for free without paying so its defintely worth doing so
In the US we have a law that makes all credit agencies give us a free copy (without the score) every year. Does Australia have the same type of laws?
EDITOR: Free copies are definitely available as I have outlined in the article, I believe 1 free copy can be requested / 12 months
If your are defaulted with incorrect spelling in your name , ever though you used you actual DRL number and DOB, how would you go about getting the corrdct name changed on the default listing?
with the condition the economy is in right now, life will be harder for people if they have bad financial habits… if they end up with bad credit rating… then things have turned from bad to worse! identity theft though, is a totally different story… some ways to protect yourself, make sure that your gas receipts, atm and credit card statements are not left behind. tear, shred, burn any private statements that contain financial information that you no longer need. always have your social security safely kept. if your doing some transactions with somebody, double check, do research if they are legitimate or not. always keep a close eye with your credit report and your financial statements… they may be quite simple, but things like these could be easily overlooked because of some other ‘pressing matters’, but it will help you prevent identity theft from happening to you… not fool proof but, it helps…
Bad financial habits are not the only things that can stop you from being able to get credit. I earn $180k p.a. and applied for an $80k personal loan with a credit union.
This was declined. Because of this I can’t apply for even a miserably small ($500) personal loan for the next three months as banks have a policy that if you are declined from getting credit from one institution within the previous 3 months then you will automatically be rejected.
This is absolutely ridiculous as it has nothing to do with my ability to service a personal loan.
I have been late with my personal loan repayments on several occaisions. They have always been paid but have been late. Will this affect my credit rating and if so for how long.
when i moved to my new address i went into optus and told them i moved form gold coast to hervey bay they changed my address on the computer but i never got any phone bills went for a car loan with esanda finance got told i had a outstanding phone bill i havent paid so i rang optus had a talk with with them and they said they could not find my new address on file so now i got a black mark on file i paid the amount for the bill, now went for a new loan got knocked back on the mark am really pissed off with it i want to try and get the mark taking off i know its on for 5yrs but is there anyone who can help me and let me know hopw to get it taking off thanks
Are you sure that credit agencies do not charge anything for retreiving credit report? What advantage they get by working for us for free?
with the condition the economy is in right now, life will be harder for people if they have bad financial habits… if they end up with bad credit rating… then things have turned from bad to worse! identity theft though, is a totally different story… some ways to protect yourself, make sure that your gas receipts, atm and credit card statements are not left behind. tear, shred, burn any private statements that contain financial information that you no longer need.
Just thought that I would add as an aside, that bankruptcy is not the be all and end all. Infact people have managed to come back from that experience and rise to peaks that not many have climbed.
Aussie John Symonds, of Aussie Home Loans fame is such an example.
Just on the topic of credit files, not all credit defaults are retained for five years – some can be retained for seven. For example, if you simply fall behind in payment and wind up with a default listing, it is likely that this will stay on your file for five years.
However, if you ‘clearout’ – for example, if you change address and don’t notify your credit provider, or if they are unable to locate you after making reasonable efforts – the default listing can remain for seven years.
Contrary to common belief, paying the outstanding amount does not remove the listing from your credit file. The credit provider would be obliged to update the listing to ‘paid’, however the listing itself would still appear on your credit file, and would be visible to any company doing a credit check on you.
Unless the default was invalidly listed in the first place, which is fairly uncommon, then the default will stay for five or seven years, whether you pay it or not.
Regards,
Chris
I think it is very important that every person in the world learns to manage his finances well. People taking huge loans are unable to repay the amount back to lenders.
So be well aware what you are getting into before you take a loan or apply for a credit card.
Ok, I split from my wife for reason not stated here. And in the process I had a mobile phone account and a Mastercard account with Virgin. When I moved out I changed my address with the Mastercard but not the mobile, as she said she would pay it off as she smashed the mobile (long story). So from my first move to my second place, I never got the final bill for the mobile. So this then went to a collection agency (the black mark). Once I got this final demand letter I paid it straight away.
Now after been rejected for a loan I got a hold of my file and this was the problem. So what can I do about this matter? please help me…
Similar to the last story…..PLEASE HELP …..separated from my ex wife 3 yrs ago. about a year ago i applied for a loan and was rejected. Upon getting a copy of my credit file, 1 unresolved matter. Turned out to be a water board bill unpaid from waaaay back. I immediately paid it. I then applied at several financial institutions and was rejected again. I paid the $27 again to access my credit file. This time there was a small amount owing on a joint credit card I had with my ex wife, also years back, but hadnt shown up on the previous report i paid for. How is this possible???? I paid this immediately. Now i’ve applied again and rejected. The institution doesnt say precisely what caused the NO answer, they just said a couple of things on my report. I have no outstanding items on my credit file, i have no credit cards, I am on $92000 gross and want $30k over 5 years. I have enough to cover the loan without question and yet am being rejected for measly sums that were paid the second I was made aware of them. Am I stuffed for 5 years now and unable to borrow, because my file is black marked, included rejected loan applicatoins? I have no idea what to do now.
It’s interesting seeing the differences between Australia and the US bankruptcy laws. After 7 years in the US you can rebuild your credit and even get a loan for a house after a short period of time if you are resolving credit properly.
Whatever you do – do not use a credit consolidation company…they are all rip-off’s!
You need to apply to a couple of credit cards. As soon as they arrive – cut them up – but leave the accounts open.
If you are making 92K and you don’t have any other debt…why can’t you save up 30K and pay cash? Should only take you a couple of months if you are very conservative in with your spending.
It is always good to be checking up on your credit report as a lot of times you will find incorrect information or fraud on them.
Bad credit costs a fortune in increased interest payments. It’s worth a small fortune to repair your credit. Fortunately, you can do it yourself free.
I’ve tried Veda once. It’s free and worth it. I’ll give BNB a go.
The important thing you should do once you’ve got your credit report is to check every detail on the statement. Remember the credit reference agencies receive millions of transaction records every year. The potential to make mistakes is high and you should not be surprised if there is a mistake on yours. If you do have credit problems and potentially adverse items on your credit report I think each of us owes it to ourselves to make sure we are not also being punished unnecessarily.
My situation is slightly different. 2.5 years ago we were given a quote for a service and then received a bill for twice the amount. When we argued, the business owner would not listen and would not compromised. She took us to court. We tried many times in vain to settle out of court. The Magistrate found that we were charged inaccurately and applied an amount much less than anything we had offered previously. The amount due was paid immediately. Unfortunately, unknown to us, it is legally the responsibilty of the Courts in QLD to lodge a default with Veda Advantage on the day of the court case. We were not told of this at anytime, so until we applied for a loan we were unaware of the judgement listing on our credit file. We have been investing in Property for over 12 years and have never had a default on anything. Yet, the Bank decided that they would turn us down this time because of a $528 Judgement. Is there anything we can do to remove this from our file? Or do we have to miss out on the bargains now to be had, as it will not drop off our file until 2012? By then the market will be on the way up.
I have been paying for my credit card every week. I applied for a new one a week a go and unfournately my bank wouldnt let me.please help me because i have no idea whats going on. I have a full time job i have been paying $50 out of pay cheqe every week without any delays for the last two and a half years.someone has to have a good reason!
I am now 33 and when i was 19 i stupidly got a loan with a friend for a car. She had the car and then defaulted on the loan due to illness. I was interstate at the time and had limited contact with her. as the years went on, i had not needed to get any loans for anything until a couple of years ago when i returned to QLD and thought i could do with a car to get around. I have found that the 17990 loan jumped to 33k and judgement has been entered on my credit file. I know i co signed (so am legally and jointly responsible for the debt), but in saying that, will it ever leave my credit file or will it be there forever ? i am in the process of tracking the girl down – gotta love facebook at least for that kind of information
Hi Everyone, As previously stated in the details, you can get a free copy of your credit file from Vedaadvantage. It will take approx 10 working days.
I have a service that will allow you to get a copy of your credit file by email within 3 business hours. Unfortunately it is not free but we have found some people need their file a lot sooner.
We have also been recommended a lot of business from http://www.mortgagenow.com.au they do home loans for people with bad credit.
if I can be of help, please go to http://www.mycra.com.au/contactus
By the way, we also offer a creditfile repair service if thay is of any interest and details are available on the website..
In the US congress has enacted a new law allowing you to view your credit file from all three credit bureaus online at http://www.annualcreditreport.com. You can get an instant report online, by phone or through the mail.
I have a default listed on my credit file. It was about $400 that was owed to an electricity company. I paid the amount in full late last year when the company called me to inform me of the default. It was from over two years ago when I moved out of an apartment I was living in with a friend. I asumed that she paid the final bill as she moved out a month after I did. I know I should have double checked this, but I have always had the same mobile number, the one listed with the agency that they contacted me on last year. Why was I not informed earlier?? If they had have called me two years ago when the amount was first overdue I would have paid it and I would not now have a bad credit file. Can the company get away with this? Is there any way I can get this off my file? I now can’t even get a low limit credit card, and I shudder to think what would happen when I apply for a car loan as I’m planning to do sometime later this year.
Hi Felicity,
In short, yes, you have a good chance of having the default removed from your credit file.
You will need to get as much info as you can, send it all through to us and we can get the ball rolling.
This is not a free service though. You will need to invest $1496 to remove one default and $499 for any additional defaults. (Full costs can be found at http://www.MyCRA.com.au/repair/forms/flow.php )
Also, you need to be aware that there are no guarantees of having the default removed.
You could go through the process and not get all of your defaults removed.
Our success rate is 80.50% of all defaults we tackle do get removed so you have a very good chance of cleaning up your credit file.
The web address for general information is http://www.MyCRA.com.au/repair.
The process will take approx 21 days from receipt of your fully completed application form.
If you would like additional information, please feel free to call 1300 667 218
Thank you, I hope this helps.
Graham Doessel
MyCRA.com.au
i have recently had my car repossesed because my bank dishonered my account 3 times can anyone help me. as i am a disabled pensioner and need a car
I went through some times and got a credit consolidation place and even after paying off all my debt, it still haunted me that I went there. When I applied to get my luxury apartment, that is what bit me in the end…
hi, i want to change my last name to my mothers maiden name, will this give me a seperate and clear credit rating???? (in australia)
If you have been placed in default correctly due to non-payment on a bill, rarely will a company remove the listing. Only update it from being unpaid to paid. This is due to responsible lending in australia, I know plenty of companies who abide by this.
If you had a judgement entered against you by the court, that will remain on the registry and the information will be available for any future credit checks. Again this can be either a paid or unpaid judgement.
It would be suggested that if you ever reach the end of a loan term, have a default notice expire against a debt, have been overdue more than 3 months on any bills/repayments, or finally pay something out to give a call to the company you have been paying or obtain a copy of your credit report to see how your name is standing. better to find out right away rather than not hear anything and assume its all well and good then find out years later that you were defaulted against and couldnt get a home loan or car finance.
Getting the free credit check is the first step to taking control of your finances(as has been probably stated over and over again). That way you know what to fix and which gets priority. It certainly pays not to go in default!, expensive to fix!!
I like how Dymphia says about John Symonds. inspiring
Matt
I am amazed by the amount of credit check companys out there, to the ones leaving there details and promoting there companys: How can someone afford to pay $1496 if they are broke or financly in trouble? you are a bunch of leaches and money grabbers, in this world there are always some people trying to scam some down and out people, get a honest job. to people out there there is alway a free credit check go to your local goverment web site for details. cheers good luck & keep your money under your bed like me lol