what is a credit file?

What Is A Credit File?

A Credit rating has such a huge impact on our lives, but so little is known about it. Learn what is a credit file, what info is stored and how it affects you.

If you’ve ever borrowed money or taken out a credit card, then it’s likely you’ve come across the term credit file before. However, not many people actually know what a credit file is and how it can affect your ability to take out future loans. Are you wondering, what is a credit file? We take you through exactly what it is, what it contains and how you can make sure yours is in the best condition possible.

What Is A Credit File?

Are you wondering what is a credit file? Put simply, it’s a detailed summary of how you’ve handled your past loans and credit accounts. Each listing in your credit file is weighed up to give you a credit score. This is the number potential lenders use to determine whether or not you’re worth the risk. If you have a low credit score, it means you have a poor borrowing history, which makes you a risk to potential lenders. If you have a high credit score, it reflects positively on your borrowing history.

In order to understand exactly what is a credit file, it’s important to look at what makes up a credit file.

your credit file

What Is A Credit File? What Information Does It Contain?

Are you asking yourself, what is a credit file? There are three credit bureaus in Australia that can provide credit reports, and each one will calculate it a little differently. But here’s the information you can expect to find in yours:

  • Personal information: such as your name, address, date of birth and more.
  • Credit accounts currently open: it will list the types of accounts you have open, along with how much you have been approved to borrow. If your credit utilisation ratio is too high, this will reflect your credit score. You don’t want to be using all the available credit to you.
  • Enquiry information: every time you make an enquiry into a loan or credit provider, this is marked on your file. Too many enquiries suggest you’re borrowing beyond your means, or being knocked back too many times. If you are genuinely shopping around for the best lender, do it in a short space of time for it to only count as the one enquiry.
  • Repayments: your credit file will detail how you’ve managed your past debts. Have you made your repayments on time? Have you been late with repayments? Have you missed repayments? A good repayment history will reflect well on your file.
  • Outstanding debts: if you’ve failed to repay debts, this will also reflect poorly on your credit score. For example, bankruptcies, court judgments and more.
bad credit

Good vs Bad Credit File

Now you understand what is a credit file, it’s important to know the difference between a good and bad credit rating.

Your credit rating can be a number from 0 to 1200, depending on your credit bureau. If the score is below 200 it is considered very low. Even if it’s below 500 it can be questionable depending on the lender and could result in a loan application being rejected.

If you find yourself with a bad credit score and are looking to take out a loan, a great option is to go through the process of credit repair.

What Is Credit Repair?

Have a low credit score can affect your ability to take out loans or other forms of credit. Credit repair is the process of fixing poor credit by looking out for any mistakes or inaccuracies listed on your credit file. It usually involves the help of a third-party company, which will attempt to have negative listings removed from your credit file to improve your credit score.

There may be listings on your credit score that are incorrect, which is always the first step for a credit repair company. Some of the things you can get fixed include:

  • Errors by the credit reporting agency: your information may have been reported incorrectly. For example, a debt may have been listed twice, or the amount of debt could be incorrect.
  • Errors by the credit provider: a credit provide could have given the wrong information. For example, they could have listed a payment overdue when it was paid on time, or created an account by mistake.

Mistakes do happen, and credit repair is one of the best ways to get on top of them and have your file corrected.

Improve Your Credit Score Today

Are you looking to improve your credit score? Contact the experts at Clean Credit today. We’re a credit repair service that will help to improve your rating so you have more opportunities when it comes to taking out loans and other lines of credit in the future. If you’re ready to improve your credit score and get back on track financially, get in touch today.

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