A credit file is simply an elaborate history of the money an individual has borrowed, the credit used and also whether that individual has cleared debts and made bill repayments within the allotted time.
An individual’s credit file may have the following information:
- Details of loan defaults and overdue debts
- Previous credit applications made by the person
- The amount of credit queries made by the individual in the recent past – generally five years
- The credit categories the individual have applied for
- The lenders’ names who have provided the individual with credit
Is My Credit File a Bad Credit File?
Every credit provider has a different system of assessing credit reports, so it can be difficult to truly define if an individual has a good or bad credit file. Your credit file is a simple record of data from the credit bureau, which is then reviewed independently by the lender. A good credit file may result in instant approval. While the loan applications from people with bad credit files may be rejected.
Here are some things that may appear on the report of an individual with a bad credit file.
Bad Credit File: Late payment of bills
A credit report can turn out to be negative even if a person is late in paying the electricity or telephone bill. According to Privacy Act enacted in 1988, an overdue debt can be liable to be listed in the consumer credit report. This is applicable for debts over $150 and due for more than 60 days.
Before the credit provider can list an incident as a default, a written formal notice must be sent, seeking payment of overdue debts. Another written notice which states that the concerned default can be listed with credit reporting bodies must also be sent. If the overdue debt is repaid, it is the duty of the credit provider to update the same on the credit report. However this does not always happen.
Bad Credit File: Impacting the credit report
Non-compliance of paying the minimum balance on credit cards can impact the credit report. Since March 12, 2014, information on repayment history, like whether the individual makes loan and credit card repayments on time is reflected on the credit report. While one late payment may not impact the credit-worthiness, a string of late payments indicates your poor financial condition and may impact the credit report in a negative manner.
Changes Made to the Credit Reporting System
New rules enacted from March 12, 2014 include the provision of adding positive data in the reports. This could include information like the date of opening of the account and closing it, credit limit, the credit account categories and also a repayment history spanning 24 months. History of repayment can be offered only by licensed credit providers.
How do I repair My Credit File?
If you have been rejected for a loan or credit card application, you could have a bad credit file. Clean Credit specialises in having negative credit listings removed and improved from credit files. Through our credit repair service, we can help you to improve your credit score and gain access to the finance you need. Find out who can access my credit file.