What’s on Your Credit Report? Why does it matter?
What is a Credit Report?
A credit report is a record of information relating to your personal credit history.
This report can be used by credit providers, like banks and telecommunications institutions, when assessing an application for credit.
You will have a credit report if you have applied for credit or have a credit account. This includes applications for a new phone contract, credit card, loan, mortgage or hire purchase.
When you are applying for credit for the first time, the credit provider will record your personal identification details, and will note the type and amount of credit applied for.
Your report will be updated for every credit application or enquiry or via updated information from your credit provider.(regardless of whether the credit was approved or not)
The following credit reporters operate in New Zealand
What Information is Available on a Credit Report?
Your credit report contains the following information, which is permitted under the Privacy Act.
- Personal details (full name, gender, current and previous two residential addresses, date of birth and current employer)
- Bankruptcy acts
- Court judgments and other public record information
- Company directorships
- Default data (overdue payment information)
- Number of credit enquiries made, by whom and when
From April 2012 your credit file can show how much you’ve borrowed and whether you are making regular repayments (such as credit card, hire purchase, car finance and mortgage repayments) on time. Your payment of power and phone bills may also be included on your credit file. So the more repayments you make on time, the cleaner your credit record will be.
Who can access my Credit Report?
Generally, only credit reporting agencies, credit providers and yourself. You must first give permission for a credit check to be undertaken.
Why, what’s on your Credit Report Matters!
As part of the loan application process, Banks will run a credit check on you – they are looking to see if you have a good or bad credit history, as past behaviour is often a good predictor of future behaviour.
Banks will look closely for any past and or existing unpaid defaults.Defaults can stay on your record for up to 5 years. If there are existing unpaid defaults Banks will generally not proceed with assessing a loan application until the outstanding default is paid, and then they will require an explanation (acceptable to them) as to how the default occurred.
Banks also check credit files to assess how frequently and with who credit has been applied for. Frequent and multiple applications for credit can be a cause of concern to lenders.
Banks will also check the names of lenders names appearing on the report against liabilities disclosed to ensure that all debt has been declared.
Can I get a copy of My Credit Report?
Yes! You have a legal right to request information held about you by a credit reporter – at no cost.
How do I request a copy of My Credit Report?
You have the right to request a copy of the information held about you by a credit reporter – at no cost. If you want the information quickly (within five working days) you may be required to pay a reasonable charge, but otherwise it’s free.
To order a credit report, contact the following credit reporters directly. Just make sure you select the regular application option if you don’t want to pay – it will take longer than an express service but there’s no charge.
Karen Lewis August 3, 2014 Blog