What is contained in a credit file?
A great deal of information is contained in a credit file. Your name, date of birth, drivers licence number, address, current and past employers, applications and enquiry for credit, details of overdue accounts, and public record information.
Information permitted to be contained on a credit file is outlined in Section 18 E (1) of the Privacy Act 1988 (Cth). Section 18 E (2) (a-f) of the Privacy Act 1988 (Cth) outlines information which may not be contained in your credit report. These include such things as race, political and religious beliefs, medical history and criminal history.
How long is information stored on a credit file?
• Court writ or summons: 4 Years.
• Credit enquiry, court judgment, Payment default: 5 Years.
• Bankruptcy, Part 9 Debt Agreement, Clear out: 7 Years.
• Previous Directorship, External Administration: 10 Years.
Who are the main credit reporting agencies in Australia?
Veda Advantage. Dunn & Bradstreet. Tasmanian Collection Services. One should check the information held on their credit file held by all of the above listed organisations. It is not sufficient to check with only one of the credit reporting agencies.
What is the most common affection on a credit file?
The most common affectation on credit reports is a DEFAULT LISTING. A default listing comes about as a result of non payment or late payment of a credit account. A credit account is anything from a credit card to trade accounts even a utility bill.
Prior to a creditor listing a default against an individual, they must be a credit provider within the meaning of CREDIT PROVIDERS as defined by Section 11B of the Privacy Act 1988(Cth).
Further to this for the consumer to avail themselves to the provisions of the Privacy Act 1988(Cth), the definition of credit as defined under Section 6(1) Privacy Act 1988 (Cth) must be established in that the (loan sought must be wholly or predominantly for domestic or house hold purposes). In other words if the nature of the loan or credit sought is commercial the Privacy 1988 has no application.
It should be noted credit reporting agencies extend the same courtesy to companies and commercial individuals by following the same regime in determining if the default is valid or not, however they are not bound by the legislation.
If the credit provider fails to establish they are a credit provider by way of reference to the Act the DEFAULT LISTING is illegal and must be removed under Section 18 E (8) (a) Privacy Act 1988(Cth).
If the credit provider overcomes the hurdle of Section 18 E(8)(a) then the credit provider may list a default and the credit reporting agency may record the default if the following is complied with:
1. 18 E(1)(b)(vi) Privacy Act 1988(Cth), allows a credit reporting agency to list a default if the outstanding amount is more than 60 Days outstanding and an attempt to recover all or part of the outstanding amount is made.
2. Paragraph 2.7 Credit Reporting Code of Conduct requires the credit provider to notify the affected party by way of correspondence at their last known address of the outstanding amount and advising them that they seek to recover the same.
3. 18 E(8)(c) Privacy Act 1988(Cth) requires the credit provider to advise the individual that their details may be provided to a credit reporting agency.
Should the above not be complied with, the default listing is not valid and should be removed from the individual’s consumer credit file in accordance with Section 18G Privacy Act 1988 which requires a credit provider or credit reporting agency to ensure personal information contained in a file or report is accurate, up to date, complete and not misleading.
Credit reporting in Australia is governed by the PRIVACY ACT 1988(Cth) and is supplemented by the Credit Reporting Code of Conduct. The legislation is difficult and in some instances fails to meet the requirements of effective regulation of credit reporting in this country.
The writer is an advocate for scraping our current regulatory frame work and starting a fresh with legislation which is concise and seeks to eliminate the short changing experienced by the consumer under our current system.
A constant source of aggravation for the writer is the distinction between a consumer and a commercial credit file. The Privacy Act regulates only for the consumer, no provision is made for corporations or commercial individuals.
Maybe the law and parliament did not intend such entity or class of individual to be protected? Or, could this be one example of the systematic and continuous short coming inherent in the legislation.
The lack of regulation causes a great deal of confusion and frustration in the market place (for both consumers and corporations) making this area of law difficult to police.
Change is required immediately, the substantive newly adopted changes to credit reporting in Australia to be implemented in 2011 falls short on this issue.
The writer continues to caution individuals about the importance of credit worthiness as reflected in their credit file. The integrity of one’s credit file must be maintained at all cost, if an incorrect or disputable listing is discovered such listing should be addressed by way of removal immediately.
Credit repair companies - fact or fiction?
The task of achieving a correction to a credit file is daunting and difficult given the available legislation. One may choose to engage the services of a credit repair organisation or a credit repair company to assist with this task. This choice brings with it its own inherent risk and problems.
Credit repair companies or organisations in the writer’s experience do not understand the legislation governing this area of law, and as such are unable to advance a clients position fully.
This is evidenced in the hit and miss approach they adopted in repairing a credit file. They continuously short change the consumer by charging an upfront fee and not delivering the service; they subrogate the consumers’ needs by focusing on the fees they generate for themselves with little consideration to their client’s interest, and as such make a mockery of the well established concept of fiduciary duty (to act in good faith).
Credit repair in this country is a farce, in that organisations purporting to provide this service fall short of the commitment, knowledge and ethical standards required in servicing individuals afflicted with credit reporting issues.
The writer continuously advances the concept that consumers requiring assistance with issues appearing on their credit report should seek the assistance of professionals, such as lawyers or competent credit repair organizations who understand or are capable of understanding this field and who are bound by codes of ethical conduct.
To conclude
Be aware your credit file is an insight into your credit worthiness. Its integrity is paramount to your financial well being. In today’s tight lending market even a small blemish may see you rejected for credit or subjected to credit where the rate of interest imposed is well above the most competitive rate offered in the market place.
Should listings on your credit file be discovered, you are able pursuant to legislation to challenge such listings. You may be able to do this yourself or you may choose an organisation to assist. Should you choose a credit repair company make sure you do your homework as to their credentials and as to their ability in this complex field.
Research your options, be mindful there are government agencies that may be able to assist; a good starting point if you discover an issue on your credit file is to contact the Privacy Commissioner in your state and explore what options are available.
Subscribe to a service offered by credit reporting agencies such as Dunn & Bradstreet or Veda Advantage which notify you of activity on your credit file.
Adopt a proactive approach in dealing with creditors; log with precision all correspondence between yourself and a creditor especially if the issue in question relates to the conduct of the account.
Joseph Trimarchi National President of the Credit Repair Association of Australasia and Solicitor specializing in Australian Credit Reporting Law and credit repair. The information contained in this article is for educational purposes only and as such should not be construed as legal advice. Joe can be reached at joe@josephtrimarchi.com.au or phone 9890 4811
