What is your credit file?

A credit history is a record of a borrower’s responsible repayment of debts. A credit report is a record of the borrower’s credit history from a number of sources, including banks, credit card companies, collection agencies, and governments. A borrower’s credit score is the result of a mathematical algorithm applied to a credit report and other sources of information to predict future delinquency.

When a customer fills out an application for credit from a bank, credit card company, or a store, their information is forwarded to a credit bureau. The credit bureau matches the name, address and other identifying information on the credit applicant with information retained by the bureau in its files. The gathered records are then used by lenders to determine an individual’s credit worthiness; that is, determining an individual’s ability and track record of repaying a debt. A bad credit report can result in a decline for a loan application.

The willingness to repay a debt is indicated by how timely past payments have been made to other lenders. Lenders like to see consumer debt obligations paid regularly and on time, and therefore focus particularly on missed payments and may not, for example, consider an overpayment as an offset for a missed payment.

Here’s what might be listed in your report:

• Your personal details. Your name, date of birth, current and past addresses, employment and driver’s licence number.
• Your credit history. Listings of any credit or loans you have applied for, defaults (overdue payments of 60 days or more where collection activity has started) and any other credit infringements (infringements can be listed for up to five years after they occurred, or seven years for serious infringements).
• Repayment history. Dates your credit payments were due, whether or not you made the payments by the due date, which dates you missed any payments.
• Other information. Bankruptcies (for up to seven years after they occurred), court judgments, debt agreements and personal insolvency agreements (for up to five years after they occurred).

You can check your credit history on veda.com.au