August 2, 2017 0

What Stays On Your Credit Report And For How Long?

Posted by:Charles Bosse onAugust 2, 2017

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A credit report is a detailed document that lists your history with creditors and has a considerable effect on your future financial opportunities. Possessing a ‘good’ credit report is regular so long as you pay your bills and debt repayments punctually. Having said that, overlooking a repayment on a bill or debt repayment can cause significant complications if you need to gain credit again down the road. In recent times, the rules have been remodelled to place a greater focus on desirable history such as paying your bills in a timely manner, but overwhelmingly, credit reports are utilised as a means for lenders to examine your abilities to repay a loan by looking for any financial errors you’ve made before. If you have made some financial oversights, how long does this information stay on your credit report? What types of financial oversights are more severe than others? This blog will investigate these questions to give you a better understanding of how these documents work.

What Do Credit Reports Consist of

The following will provide the type of information that is normally found on your credit report:

Personal Information for instance your name, address, DOB and driver’s licence details

Joint applicant details if you’ve obtained credit jointly with another person

Credit card information

Arrears brought up to date, for example, any overdue or unpaid debts that have since been repaid

Defaults and other infringements such as missed minimum credit card repayments and loan repayments which are over 60 days overdue

All credit applications

Debt agreements such as bankruptcy, personal insolvency, and court judgements

Repayment history which is probably the most crucial component of your credit report. It covers all credit accounts like home loans, car loans, personal loans and credit card loans. Any missed repayments will feature information such as the due date, paid date, amount, and any partial payments if applicable

Commercial credit applications for example any business or commercial loan applications

Report requests which lists all the creditors who have previously requested a copy of your credit report1

Credit Report Defaults

Defaults with lenders will be mentioned on your credit report and will have an effect on your capacity to acquire credit in the future, so it’s imperative to understand what constitutes a default on your credit report. If you cannot make a payment on a debt, your creditor has the ability to report your debt to a credit reporting agency who will then record this information on your credit report. However, creditors can only do this if the following rules apply:

The default amount is $150 or more;

You’re a ‘confirmed missing debtor’ or ‘clearout’ which signifies the lender cannot contact you because you have changed your contact number and address;

The debt is 60 days or more overdue; and

The lender has asked you to pay the debt by either sending you written notice in the mail, or by asking you over the phone1

Your lending institution must notify you of any intentions in lodging a report prior to doing so. Typically, your contract or service agreement will detail when a default can be made and reported to a credit reporting agency.

How Long Does A Default Remain On My Credit Report

In the majority of cases, a credit default will remain on your credit report for five years, although if a creditor cannot contact you because you’ve changed your contact number and address (also known as ‘clearout’), the penalties are more extreme and the default will continue to be on your credit report for 7 years. It is essential to bear in mind that even when you do repay an overdue debt, the default will nonetheless stay on your credit report, but the status will be updated to reflect that the debt has been settled. When you apply for a loan, the financial institution will always assess your credit report first and if there are any defaults, the creditor can reject such loan applications. If this is the case, the lender must notify you that your application has been rejected founded on your bad credit history.

As you can see, credit reports are serious documents that can significantly impact your borrowing capacity and financial flexibility. In most cases, credit reports are either a pass or a fail, so any default, irrespective of how big or small, will be shown on your credit report for five years. Even though there are measures to improve your credit rating (such as paying your bills on schedule), creditors are really only interested in any defaults on your credit report and can reject a loan application based on a single default. If anything, this article highlights the importance of paying your bills and debt repayments on time, so if you find yourself with any financial troubles and can’t pay your bills by their due date, talk with Fresh Start Solutions Gold Coast on 1300 818 575 for assistance, or visit their website for more information:



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