Every lender checks your Credit Report when you apply for a loan so they can see what your credit history says about you. Many people think that if they don’t say anything on their application form that the lender won’t know about that little issue that happened a few years ago…… or that they’ve applied for a few loans in the last couple of years and they’ve been rejected.
But lenders have access to your credit (or lending) history through your Credit Report. They will do a car loan Credit Report check as part of the loan application process, and if you haven’t been completely honest about your financial circumstances, this is when they will find any skeletons you’re hiding!
How Far Back Does The Credit Report Go?
When you first open a credit account your details like name and date of birth are recorded. After that, information is added from any lenders you have allowed to release information about you (which you do as part of any credit application).
So What Does Your Credit Report Show?
Your Credit Report shows the loans that you have taken out but it also shows loans that you have applied for. Lenders get suspicious if you apply for lots of loans but don’t take them. It looks like you were rejected by all those lenders and makes the new lender nervous that there must be something undesirable about you as a borrower! So avoid applying for lots of loans or credit cards. This is when it can be useful to use a service that does the shopping around for you, like a finance broker, because they have software that compares lots of loans. They can do the comparisons and work out the best loan for your needs, so you only need to fill in one application, and only one application for credit shows up on your credit file.
The other information on your credit report is:
- Your current name and any previous names
- Date of birth, gender, address and your two previous addresses
- Your employer and driver’s licence number
- Details of any credit you have applied for including the type (loan, credit card, etc) and the amount
- The date you opened your credit accounts
- The type of credit accounts you opened (home loan, personal loan, credit card, etc)
- The date a credit account was closed
- The limit available on each credit account (so how much you can spend or withdraw on each one)
- Basic details about the repayments of the credit (interest only or principal and interest)
- The lender that you have taken out the credit with
- Default information (if you have a payment of $150 or more owing for 60 days or more that you have been sent reminder notices for. And these will stay on your credit report for 5 years!)
- Details of the payment of a default including the date and amount that was paid
- Details of any payment agreement that you have in place to pay a default
- Details from the past 2 years of loan repayments showing whether they have been made on time
- Notes from any credit provider that believes you have tried to get credit fraudulently, have avoided paying repayments fraudulently or that you will not make your required repayments (after trying to contact you for 6 months without success)
- Details about any bankruptcy, insolvency or debt agreement.
- Details of court judgments about credit
What if The Information Is Wrong?
Then you need to get in touch with the credit provider (the lender) that gave you the credit and they will investigate it. This can be difficult, or take longer, if the default is from a few years ago, so the best thing to do is check your credit history each year or two so you can quickly follow up any errors in your report.
Get a Copy of Your Credit Report, and Check It!
You can apply for a free copy of your credit report every year from the credit reporting bodies in Australia. Probably the easiest one to use is at www.mycreditfile.com.au You need to fill in an application form on their website so they have enough details to confirm that you are the person that you want the information about (so you can’t just ask for a credit report on someone you know!). They will send you a copy of your credit report for free within 10 days, or you can get it sent more quickly by paying a fee.
If you’re in a hurry to apply for a loan, the lender will check your credit report before they approve the loan anyway. So you don’t need to do this – it’s just another way that you can make sure you are in the best financial position before you apply for a loan. This way you can get the best deal and help the loan application get approved as quickly as possible with no surprises!
If you’re ready to find the best car loan for your situation just get in touch with us through our Enquiry Form.
Have you had an experience with your credit history that you’d like to share?