AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Highlights
- If you’ve ever applied for credit, including a credit card, home loan, car loan or personal loan, you’ll have what’s known as a credit report (otherwise known as credit history).
- The good news is, there is a time limit to how long credit agencies can legally hold onto your credit information. The length of time depends on the type of information.
- Every Australian has the right to obtain their credit report every three months for free.
Pandemic-enforced lockdowns imposed across Australia in 2020 and 2021 saw record levels of credit card spending as people try to kill boredom with a little retail therapy.
In fact, monthly payments data from the Reserve Bank of Australia (RBA) showed purchases on credit and charge cards totalled AU$28.9 billion last November, which was 6.8% higher than October and 9.6% higher than November 2020.
Along with credit card spending comes instances where people are unable to repay the debt on time, leading to bad credit ratings. This can have a debilitating impact when you go to get a mortgage or purchase a car on loan, as the lingering credit rating puts an immediate stop to that process.
But how long does it last? Does it go away? Are you stuck with it forever?
Let’s examine this, shall we?
Image Source: © Kowniewping | Megapixl.com
What are credit reports?
If you’ve ever applied for credit, including a credit card, home loan, car loan or personal loan, you’ll have what’s known as a credit report (otherwise known as credit history).
These reports are held by specialist agencies and contain information pertaining to your credit history. This includes your credit obligations. It’s important to note that this doesn’t just include any credit cards or loans you’ve received but also telecommunications and utility bills. It also keeps a record of whether you’ve ever defaulted on your payments or if you’ve claimed bankruptcy as well as any court judgements against you.
How long do these agencies keep the information?
The good news is, there is a time limit to how long credit agencies can legally hold onto your credit information. The length of time depends on the type of information.
Some examples of this:
- payment history information removed after two years
- a default – five years
- a serious infringement – seven years
- bankruptcy – five years
- a notice of court judgement – five years
Your credit report is based on three main components:
- the amount of money you’ve borrowed
- the number of credit applications you’ve made
- whether you pay on time
What can you do?
Every Australian has the right to obtain their credit report every three months for free. You can apply online and it usually takes two or three days or up to 10 days by mail. However, be aware that you may have to get your report from several agencies as different agencies hold different information.
To avoid the problem of debt following you for years, keep good financial records and pay off debt as soon as you can.
