Your credit file, also known as a credit report, holds the information about your borrowing history and is created as soon as you start borrowing.
It’s what lenders generally look at to see whether or not they want to loan money to you.
Your file is made up of three components: consumer credit, commercial credit and your public record.
Each enquiry you make about getting a loan to purchase, refinance or renovate a residential investment property gets logged into your credit file.
Any debts that are overdue by at least 60 days are also included. The number of regular payments that you pay on time (and not on time) are both recorded.
Generally, all kinds of credit that you currently have (like your credit card or mortgage), how long you have had them, and what credit limits you currently have are also added in.
Again, any loan enquiries for commercial reasons, whether you are acting in a sole trader, business partner or director capacity, will be recorded in your file.
Like the consumer credit section, any overdue commercial loans are also included – for loans that are both under your name and when you are the guarantor.
Your current commercial credit providers’ information is also in your file, as well as any notes regarding matters of investigation into your business.
Your public record includes bankruptcy or insolvency declarations, debt agreements and any court decisions – including writs and judgments.
Whenever you have a monthly payment due, your credit file is updated. It is also updated when you fail to meet any of your other debt obligations.
If you’re worrying about your credit, you are able to check your credit for free once a year by contacting Veda, D & B or Experian. Your credit file should be made available to your typically within 10 days of you requesting it.
As well as this, most things on your credit file are erased after a few years:
• Repayment history is scrubbed away after two years
• Overdue accounts, court writs and judgments and any credit enquiry is washed away after five years
• Serious credit infringements also disappear after seven years
• However, consumer credit information with your credit providers can be kept up to two years after your loans with them have ended
• And bankruptcies or other debt requirements are all different according to the terms in them
The only items that you can have removed yourself are those which are proven to be incorrect.