Clear credit file vital for home loans

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The information on your credit file could affect your ability to get a new home loan, but three-quarters of Australians don’t know what it is, according to a survey by a consumer credit bureau.

Only 15 per cent of respondents could correctly describe a credit file, the study conducted on behalf of Veda Advantage indicated.

Your credit file is a detailed record of your credit history over the past seven years. As well as your personal details it contains information on any defaults, overdue accounts or bankruptcy rulings.

It will be updated every time you apply for new credit and record whether or not that application is approved. A credit file can include something as simple as an overdue bill left unpaid for more than 60 days.

Veda Advantage holds credit files on more than 14.5 million Australians and head of external relations Chris Gration told the Sydney Morning Herald that the state of your file can affect everything from your ability to have a home loan approved to getting an internet connection.

He recommends people check their credit file annually – and certainly at least a month before making any credit application. Defaults generally stay on file for up to five years.

”By obtaining a copy of your personal credit file you’ll know what financial institutions and other credit providers are looking at,” Mr Gration said.

”That way you can be ready to answer any questions that might arise from your credit file.”

The survey revealed that only four per cent of respondents requested a copy of their file in the past 12 months.

 

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