Do you remember the last time you checked your credit report? If the answer is no, then you’re like most people; you probably don’t worry about it on a regular basis.
It’s possible that you never check your credit report; maybe because you’re nervous that you won’t like what you find.
There are many benefits of checking your credit report. Here are a few reasons why you should check it regularly and how to do it.
Difference between a credit report and a credit score
Many people seem to confuse these two, but a credit report and a credit score are two very different things.
A credit report is a detailed report of an individual’s credit history, their credit card accounts and loans, as well as other personal financial information (e.g. employment information). It also lists lenders that have pulled your credit.
A credit score is a statistical number that is based on credit history and evaluates a consumer’s credit. Lenders use this number to identify the likelihood an individual will repay their debts on time.
Depending on the credit reporting agency, credit scores in Australia range from 0 to 1000 or 0 to 1200. Equifax has a top score of 1,200; Experian and Illion have top scores of 1,000. The higher the score, the more creditworthy a person is considered to be.
|Credit score ratings (scale 0 to 1200)|
|Excellent||833 to 1200|
|Very Good||726 to 832|
|Good||622 to 725|
|Average||510 to 621|
|Below Average||509 and below|
Requesting your credit report: What it means and how it affects you
Australians can request one copy of their credit report a year at no cost, so long as the individual is able to wait for ten days from the date they requested it.
If you require a copy of your credit report earlier than the ten day period or you request more than one report in a year, you may be required to pay (depending on circumstances).
It’s possible to have multiple credit report, particularly if you live in Tasmania.
Reasons to Check Your Credit Report
Save money in the long term: By being proactive about your credit, you could potentially save yourself thousands of dollars in interest payments if you have good credit. If you have poor credit, checking your credit report can assist you in figuring out how to rebuild it. Instead of guessing at the problem, the report outlines the negatives affecting you.
Prevent identity theft: It only takes moments for an individual to hack into your accounts, and more often than not we don’t notice it right away. If you see an unfamiliar account or inquiry on your report contact the issuer to find out how it ended up on your report.
Other people’s mistakes affect your credit: Even though you may be diligent at paying your bills on time, others may not be. For example, if you co-sign for your child’s credit card and they’re late on a payment, your credit may take a hit. And unless your child tells you or you have access to their account, you may not find out until you check your credit report.
Credit providers also make mistakes that can turn up on your credit report. This might be an incorrect birthdate or spelling, or even a duplicate listing. These mistakes can usually be fixed at no cost.
Find out why a credit application has been denied: Credit providers are required to let you know if an application is rejected due to something in your credit report. They may not necessarily tell you why, so you can request a copy of the report for details. Knowing where you stand can help you start to improve.
How Do I Check my Credit Report?
In order to check your credit report, you’ll need to contact a credit reporting agency to obtain a copy of it. You will be asked personal information to enable them to properly identify you; this could include:
- Full name
- Current address
- Date of birth
- Previous address
- Driver’s licence number
The following are credit reporting agencies that allow you to request your credit report. Follow the links provided to request one today.
If you’re worried that requesting a credit report is going to cost you money, there is no need. You are able to receive a free report in the following circumstances:
- Within 90 days of applying for and being refused credit
- If a credit reporting agency or credit provider has corrected information in your credit report
- Once a year if the above does not apply
A credit reporting agency must give you a copy of your credit report within 10 days of your request. If you’re looking to receive the report immediately, this may result in an additional cost.