Your credit report is an important document as it details your credit history and is the primary tool that lenders can use to assess your borrowing capacity and eligibility for a loan. If you don’t manage your credit well then it can have negative effects on your finances and you may not be able to secure loans or any other types of lending in the future.
The recent changes to the credit reporting system in Australia makes it even more important to proactively manage our credit and regularly check, update and correct the information in our credit report.
One of the most significant recent changes is the recording of overdue bills and repayments. Under the new reporting system, details of any amounts that are overdue by five days or more days can potentially be listed as a default on your credit file, along with details of when you pay the amount or how long overdue these amounts remain for.
This change puts increased importance of paying bills on time as missing a payment on a credit card, mortgage or household bill by a week or two could damaging to your credit record.
Some tips to help you better manage the payment of bills on time include:
Other general tips for managing your credit effectively include:
When you review your credit file there are a number of things you should check are accurate. These include:
If there is a credit default listed that you were previously unaware of then you should contact the creditor. You can dispute the listing and ask for it to be removed if the creditor failed to notify you of the outstanding amount or if the default was created in error or due to fraud by a third party. If you are unable to resolve this with your creditor then you can seek assistance by contacting the Financial Ombudsman Service.
Remember your Credit Report is an asset to you and an important document to regularly review and keep updated. If you would like more information on how to manage your debts or implement a household budget check out our Debt Management learning module and Savings Tips article.