When was the last time you checked your credit file (or credit report)? A year ago? Several years ago? Never? Whether you’ve looked at your credit file or not, if you’ve ever applied for a credit card you can be sure someone else has.

Banks regularly review copies of credit files for credit card applicants. Your credit file tells lenders whether or not you can be trusted to pay back your debt. In other words, it represents your credit-worthiness. A negative credit file can have financial consequences, from not being approved for a credit card to not receiving the best interest rates offered.

Credit Reporting Agencies

There are two primary credit reporting agencies (or credit bureaus) maintaining credit files for Australian residents — Veda Advantage and Dun & Bradstreet. You have the right to obtain a free copy of your credit reports by contacting those agencies. Free reports are delivered within ten days, but you also have the option to pay for faster delivery.

What Your Credit File Contains

The primary information credit card issuers are interested in from your credit file is your history of late payments or default on debts. If you have a debt more than 60 days past due and the lender has contacted you at your last known address to try to collect the debt, it can be included on your credit report. These “black marks” can make it more difficult for you to obtain future credit. Paying off those old debts doesn’t mean they will be removed from your credit file either. For most debts, the status will be updated but it can remain on your file for up to five years (seven years for more serious credit infringements such as a court judgment).

In addition to bad debts, your credit file also lists your personal information such as your last known address, driver’s licence number, and employment history. It even lists credit file enquiries. That means every time you apply for a credit card and the issuing bank checks your credit file, a record is added. Credit card companies are therefore able to see if you have applied for a large number of credit cards or loans in the last five years. Too many enquiries can make you a poor candidate for credit approval.

Why You Should Check Your Credit File

It is always a good idea to check your credit file before applying for a credit card. This gives you an opportunity to apply only for cards you’re likely to be eligible for (cutting the total number of enquiries), and it gives you a chance to have errors corrected before they can cause you to be denied credit.

How to Get Copies of Your Credit File

You can access and print forms to send to the two major credit reporting agencies from their websites. You may also be able to apply for your credit report online and even receive it via email if you’re willing to pay for expedited delivery. You can find further information at MyCreditFile.com.au (for Veda Advantage) or DNB.com.au (for Dun & Bradstreet).