What is someone's “credit history”?
Credit providers use a person's credit history, or their "credit report", to decide whether someone can afford a loan or are likely to repay a loan.
The Privacy Act 1988 (Cth) determines what information is included in credit history, how long information stays on it and how the information can be used.
Credit history includes names and addresses as well as information about credit cards and repayment history, loans, whether the person owes money (for instance because a court judgment has been entered and not been paid), whether they pay their bills on time or late, if they've been bankrupt (only within the last 7 years) and if they've entered a personal insolvency agreement (only within the last 5 years).
For information about what can be included in a credit report, see the Australian Information Commissioner's useful fact sheets.
4 major credit reporting companies which collect and distribute credit history are:
- Equifax
- Experian and
Each credit reporting company is required to provide a person with a copy of their credit report for free, each year.
Often people will not be able to take out a loan if their credit history shows they have outstanding debts or judgments against them.
Court judgments stay on a credit report for 7 years. However, if they are paid, the credit report can be updated to reflect this.