Credit reporting

A credit report can contain information about a person’s:

• previous credit applications;
• credit repayment history, including financial hardship information;
• late payments on credit contracts;
• relevant court judgments; and
• whether the person is or has been bankrupt or entered into another form of personal insolvency, such as a debt agreement. For more detailed information about what is permitted to be included in a credit report, see ‘Permitted disclosures’, below. Note that information can only remain on a credit report for a specific period of time.

Part IIIA of the PA 1988 permits credit-reporting bodies to disclose credit-reporting information to credit providers, mortgage insurers and trade insurers – but only for certain permitted purposes. Information that is permitted to be disclosed in a credit report includes:

• loan repayment information (for details, see ‘Repayment history’, below);
• financial hardship information (for details, see ‘Financial hardship’, below)
• transfer of the credit provider’s rights: the PA 1988 recognises that the repayment rights of a credit provider in relation to credit may be transferred; the PA 1988 treats the acquirer as a credit reporter for the purposes of credit;
• credit application information: this includes details of loans a person has applied for, and anything the person has bought or attempted to buy on credit; the credit report shows whether or not a loan or purchase was approved;
• default information (for details, see ‘Default listings’, below);
• court judgments: a person’s credit report should only show if a court has made a judgment against the person in relation to any unpaid loans or credit; this information stays on a credit report for five years from the date of the judgment;
• bankruptcy information: a person’s credit report indicates whether or not they are or have been bankrupt or entered into a debt agreement; this information stays on a credit report for at least five years;
• serious credit infringement information: a serious credit infringement is: a an act done by an individual that involves fraudulently obtaining consumer credit or attempting to fraudulently obtain consumer credit; or b an act done by an individual that involves fraudulently evading the individual’s obligations in relation to consumer credit, or attempting to fraudulently evade those obligations; or c an act by an individual where: i a reasonable person would consider the act to indicate the individual’s intention to no longer comply with their obligations in relation to consumer credit provided by a credit provider, ii the credit reporter has – after taking steps that are reasonable in the circumstances – been unable to contact the individual about the act; and iii at least six months have passed since the credit provider last had contact with the individual. A serious credit infringement stays on a credit report for seven years.

  Recent changes to permitted disclosures by credit-reporting bodies

  Recent legislative changes – the NCCP Act 2021 and NCCP Regulations 2021 – prevent credit- reporting bodies from disclosing financial hardship information in certain situations. Credit-reporting bodies are now prohibited from:
• disclosing to credit providers that overdue pay- ments have been collected from an individual;
• disclosing to credit providers the contents of an assessment of an individual’s suitability as a guarantor in relation to an application for credit made by another person;
• disclosing financial hardship information to mortgage insurers for the purposes of assessing the risk of an individual defaulting on mortgage credit for which the mortgage insurer has provided insurance to a credit provider.

Ordinarily, a credit report can contain information about the repayments a person has already made for credit contracts (e.g. repayments for credit cards, home loans, and personal loans).

Repayment history information can only be accessed by certain credit providers (e.g. banks). These credit providers can see a 24-month history of loan repayments.

Phone, gas and electricity providers are generally not able to access repayment information or to provide this information to a credit-reporting body. However, utilities providers can report a payment that is at least 60 days late.

A credit provider must take reasonable steps to ensure that: a it does not disclose information to a credit- reporting body about a person’s repayment history more frequently than once a month; b it does not disclose financial hardship infor- mation in relation to an individual’s suitability to be a guarantor (see below for information about financial hardship); c it does not disclose the contents of an assessment about the risk of an individual defaulting on mortgage credit by a mortgage credit provider; d ordinarily, for each month, the credit provider only discloses whichever of the following is applicable:

i- that the person’s credit repayment was not overdue for that month, or

ii- that the person’s credit repayment was overdue for that month; and e ordinarily, the disclosure is expressed as a code, as following:

i- where the person’s credit repayment is not overdue: ‘Current up to and including the grace period’, or

ii- where the person’s credit repayment is overdue, the age of the oldest outstanding payment is disclosed as a number: 1: 15–29 days overdue (this disclosure can only be made on day 15, as this allows for the 14-day grace period), 2: 30–59 days overdue, 3: 60–89 days overdue, 4: 90–119 days overdue, 5: 120–149 days overdue, 6: 150–179 days overdue, X: 180 and over days overdue.

A financial hardship arrangement is an agreement between a person and their lender to adjust or defer loan obligations because something has happened that has affected the person’s ability to pay. A natural disaster is an example, but other circumstances such as illness, job loss or relationship breakdown might also lead to such an outcome. The reason a person is experiencing hardship is not recorded on the credit report.

Financial hardship information in respect of credit contracts such as credit cards, home loans, personal loans and car loans can appear on a credit report. Hardship arrangements with phone, internet and utility companies and BNPL accounts will not appear on the credit report.

If a financial hardship arrangement is in place, this will be shown on a credit report, and repayment history will also be shown. There are two types of indicators. ‘A’ indicates a temporary arrangement or deferral, and ‘V’ reflects a permanent change and the loan is varied.

Financial hardship information is retained on a credit report for only 12 months, after which time it is removed.

A credit report can show if a person has not made repayments on time for credit contracts (e.g. credit cards, home loans, and personal loans). A ‘default listing’ on a credit report shows that a payment is overdue (s 6Q PA Act; CR Code).

A default listing can only be included in a credit report where:

• the payment is more than 60 days overdue;
• two notices have been sent, the first informing that payment is overdue and the second inform- ing that the default will be listed;
• the overdue amount is greater than $150 (or a higher amount if prescribed by the Privacy Regulation). A default listing cannot be made where:
• there has been a request for a financial hardship arrangement (and it is the first in the last four months);
• a financial hardship arrangement is in place and being complied with;
• it is less than 14 days since a request for a hardship arrangement has been refused in writing; or
• a complaint is being considered by an external dispute resolution scheme, such as the Australian Financial Complaints Authority (AFCA). Default listings are removed from credit reports after five years.

Under the PA 1988, credit-reporting bodies must take reasonable steps to ensure personal information included in credit reports is accurate, up-to-date and complete, and to correct any information that is not. Amendments to the PA 1988 set clear timeframes for processing corrections to people’s credit reports.

In addition, the CR Code requires that only permitted, accurate, up-to-date and complete information is included on a person’s credit report.