August 2, 20170

What Stays On Your Credit Report And For How Long?

Posted by:Charles Bosse onAugust 2, 2017

Declaring Bankruptcy, Bankruptcy, Bankrupt, Bankruptcy Sydney, Bankruptcy Advice

A credit report is an in-depth document that records your history with creditors and has a considerable effect on your future financial opportunities. Possessing a ‘good’ credit report is common so long as you pay your bills and debt repayments on schedule. On the other hand, overlooking a repayment on a bill or debt repayment can cause substantial issues if you wish to receive credit again down the road. Recently, the rules have been modified to place a greater significance on affirmative history such as paying your bills in a timely manner, but overwhelmingly, credit reports are utilised as a way for lenders to evaluate your abilities to repay a loan by looking for any financial errors you’ve made in the past. If you have made some financial errors, how long does this information stay on your credit report? What kinds of financial errors are more drastic than others? This post will take a look at these questions so as to give you a better understanding of how these documents work.

What Do Credit Reports Entail

The following will detail the type of information that is generally found on your credit report:

  • Personal Information including your name, DOB, address and driver’s licence details
  • Joint applicant details if you’ve secured credit jointly with another entity
  • Credit card information
  • Arrears brought up to date, such as any overdue or unpaid debts that have since been settled
  • 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 for example bankruptcy, personal insolvency, and court judgements

Repayment history which is perhaps the most significant element of your credit report. It covers all credit accounts like home loans, car loans, personal loans and credit card loans. Any missed repayments will contain information such as the due date, paid date, amount, and any part payments if applicable

Commercial credit applications for example any business or commercial loan applications

Report requests which lists all the financial institutions who have previously requested a copy of your credit report

Credit Report Defaults

Defaults with creditors will be listed on your credit report and will have an effect on your ability to receive credit down the road, so it’s paramount to understand what constitutes a default on your credit report. If you cannot make a repayment on a debt, your creditor has the ability to report your debt to a credit reporting agency who will then register this information on your credit report. However, lending institutions can only do this if the following prerequisites apply:

The default amount is $150 or more;

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

The debt is equal to or more than 60 days overdue; and

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

Your lender must advise you of any intentions in lodging a report prior to doing so. Often, your contract or service agreement will state when a default can be made and reported to a credit reporting agency.

How Long Does A Default Remain On My Credit Report

Most of the time, a credit default will stay on your credit report for 5 years, but if a lender cannot contact you because you’ve changed your telephone number and address (referred to as ‘clearout’), the penalties are more extreme and the default will stay on your credit report for 7 years. It is necessary to keep in mind that even when you do settle an overdue debt, the default will continue to remain on your credit report, but the status will be updated to show that the debt has been repaid. Whenever you apply for a loan, the loan provider will always assess your credit report first and if there are any defaults, the lending institution can reject such loan applications. If this is the case, the lender must inform you that your application has been rejected based upon your poor credit history.

As you can see, credit reports are serious documents that can drastically impact your borrowing capability and financial flexibility. In the majority of cases, credit reports are either a pass or a fail, so any default, regardless of how big or small, will be detailed on your credit report for five years. Although there are measures to improve your credit rating (for instance paying your bills in a timely manner), creditors are really only interested in any defaults on your credit report and can reject a loan application based upon a single default. If anything, this article highlights the importance of paying your bills and debt repayments on schedule, so if you find yourself with any financial problems and can’t pay your bills by their due date, get in touch with Fresh Start Solutions on 1300 818 575 for help, or visit their website for more details:



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