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3 reasons to check your credit report

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By Penny Pryor

As a student in Japan in my university days, I relied heavily on my father’s credit card, as without an income I was obviously unable to get one.

When I returned to Australia and started working, I applied for my own. But it turned out that without a credit history, they weren’t so easy to get – and the magic plastic remained elusive for a few more years.

Eventually, when I did get one, it was a debit card, with a maximum redraw of just $200, but I was so excited. I finally felt like an adult.

Over the years I’ve gradually increased that (and decreased it when I’ve realised that a credit limit of $10,000 was probably unnecessary). But at least one of those requests for increases was denied, and I had no idea why.

If something like that happened today I would know to apply for a credit report to get to the bottom of it. Here are some other reasons why it’s a good idea to do a credit check almost as often as a health check.

1) Preventative measure

Just like you might see a doctor on a regular basis for a preventative health check to make sure nothing serious is wrong, or to nip something in the bud before it gets to be a real problem, obtaining a regular credit check will let you know what information is being listed on your report. It should stop bad habits before they become terrible vices that will prevent you getting that mortgage.

There are three national credit-reporting bodies in Australia from which you can apply to get a credit report. They are required, by law, to provide you a report for free within 10 days at least once a year, within 90 days of a failed credit application and if it relates to a decision by a credit reporting body or credit provider to correct something included on your report.

Some organisations will offer you faster reports for a fee, but if you’re not in a hurry, make sure you use your free report.

National credit reporting bodies:

•    Veda Phone: 1300 762 207
•    D&B: Phone: 1300 734 806
•    Experian: Experian Credit Services Phone: 1300 783 684

2)    It could be wrong

It’s not just banks and finance related companies that can list information on your credit report. Any company that provides goods and services, which don’t require immediate payment – and which provides those services at least seven days before you have to pay for them – can list information on your report. This includes telecommunication and utility companies.

But all these kinds of companies can make mistakes and it’s not uncommon to have inaccurate information on your report, which can hurt your overall credit rating and of course impact any future applications you make for credit. For example you may have paid an overdue bill years ago, but for some reason the payment doesn't register on your report. The problem is, you won’t know about this unless you check your report.

If you see a mistake on your report you need to apply to get it changed as soon as possible. Apply to the creditor and the credit reporting body from which you gained the report. If they don’t fix your report, they are required to tell you why.

If this doesn't work, apply to the ombudsman service that is relevant to the type of credit e.g. Financial Ombudsman Service, Telecommunications Industry Ombudsman etc.

Also be aware that don’t need to pay anyone to have these mistakes fixed, so beware of credit repair companies insisting that you do.

3) The privacy laws have changed

Another reason you need to get your credit report checked is that the information that can be listed on it changed on 12 March 2014. As part of the reforms to the Privacy Act 1988, the law now allows for information to be gathered on whether or not you pay your bills on time.

Previously it would have only shown what you didn't pay or if you defaulted on your debts, under what is called a “negative reporting” regime. The new system is designed to show positive information around your bill-paying habits. It will show whether or not you have paid your credit card, mortgage or other product from a licensed credit provider on time.

Unfortunately for those of us who don't have all our bills on direct debt schemes, and aren’t as religious as we should be when it comes to our bills, it means we can't afford to be lazy anymore if we want to have a clean credit bill of health.

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Follow Penny Pryor on Twitter @money_pennyp

Published: Monday, November 24, 2014

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