What happens to my credit report?
When you are behind in repayments, your credit report may be affected. There are two ways your credit report might be affected:
- A default being recorded
- Repayment history information being recorded
A default can only be listed on your credit report if:
- You are in default (have missed repayments)
- A default notice has been sent to you giving you at least 30 days to pay the default
- A notice of intention to list the default on your credit file has been sent to you.
The creditor cannot list a default when you have asked for a repayment arrangement. The creditor can only list a default 14 days after it has rejected your request for an arrangement.
You are not in default if you are in an agreed repayment arrangement. So, the quicker you make an agreed repayment arrangement (and stick to it), the less likely that a default will be listed on your credit report.
Repayment history information (RHI) is information about whether you make your loan repayments each month. If you are up to date the payment is listed as “0”. Once you miss a loan repayment you have 14 days to catch up. After 14 days your credit report will note that you have missed one repayment. If you keep missing repayments, your credit report keeps recording the number of monthly missed repayments.
There is no requirement to give you notice that repayment history information will be listed on your credit report.
If you make a repayment arrangement (and keep to it), the RHI should reset to 0. Unfortunately, there is a lot of argument between industry and consumer advocates as to how and when the RHI should reset to 0. Further clarification is expected soon.
If your credit report lists missing repayments on your RHI but you had made an agreed repayment arrangement, consider disputing the listing with the Australian Financial Complaints Authority.