Guide To Your Credit File
Posted January 27th, 2010 and last modified July 12th, 2011
Your credit file contains your record as a consumer and will reflect your credit standing. Keeping in mind of your credit file will motivate you to maintain a good standing.
A credit file is everything when it comes to maintaining your financial status. It contains your personal information as well as your financial history both good and bad. Almost everyone has a credit file but not everyone understands what is in it and how credit providers use that information.
Table of Contents: Guide to Your Credit File
- What is in your credit file?
- Understanding your credit report
- Updating Your Credit File
- Credit History
- Identity Theft
- Credit Application Refusal
Your credit file contains a great deal of important information. It is often the only thing credit card companies, banks, or other lenders look at when considering the amount of risk they take on with your account. A credit score reflects your ability to pay bills on time based on your history of bill repayment. As a consumer you should keep an eye on your credit file for any number of reasons, not just when you apply for a line of credit. You should never be surprised to find that you have a bad credit history because you ought to be keeping tabs on it regularly.
Credit reporting is done in order for organizations like banks, utility companies, and credit providers to make an informed decision on whether or not to do business with you. It is up to you alone to ensure that the information is correct. It is also completely up to you to maintain your finances in a way that does not attract negative marks to your credit file.
Order a copy of your credit file
Receive email alerts whenever specific changes occur on your credit file for 12 months. You also receive a copy of your credit file despatched within one working day..
Receive your credit file with information on:
- Details of consumer credit enquiries
- Details of overdue consumer credit accounts
- Commercial credit enquiries
- Details of overdue commercial credit accounts
- Bankruptcy & Court Judgements
- Writs & Summons
- Information on your current relationship with a credit provider
What is in your credit file?
- Basic Personal Information. Your credit file will have your full name and your date of birth. It will also list your driver license, gender, address at which you reside, and your current employer.
- Consumer Credit Information – These are the details of your credit spending
- Applications – Whenever you apply for credit int he form of loans for your home, personal loans, or other domestic purposes it is noted in your file.
- Credit Provider - Your file will also not that your provider information is current, meaning you still have the loan or credit card with the noted company.
- Default Notes – Any overdue accounts you have will also be listed in your credit file.
- Commercial Information – The credit report will also list any commercial transactions you have made like credit applications and overdue commercial accounts.
- Public Record – As you might expect any of your personal information that is public record will also be noted on your credit file.
- Court writs and judgements
- Directorship information
- Proprietorship information
- Bankruptcy notes
Not everyone has a credit file. You get on once you have applied for a line of credit either personal or commercial. Your file may also be started by another party who holds other information as it relates to your public record. Once you have a credit report you need to understand exactly how to read it. By doing this you can avoid mistakes in your file that can lead you to be denied a line of credit or to get less acceptable interest rates then your deserve.
Understanding your credit report
- Overdue Accounts – An overdue account may be listed in your file as a payment default or a clearout. There is a distinct difference in the use of these two words that you must understand.
- Payment Default – If you have an account that you owe $100 or more on and it is at least 60 days overdue then it will be deemed a payment default. This can be any bill, utilities, credit cards, personal loans, and others can report your default to the credit agency. The provider of credit may report to the agency once they have asked in writing at your last known address or in person or by telephone to pay them the amount you owe. If you pay the overdue account the credit provider is legally obligated to note this on your credit file. However, even after you have paid off the overdue amount that note of default remains on your credit history for five years. Obviously, when a new credit provider sees default notes in your file it dies not give them confidence in your ability to repay your debts. The easiest way to avoid these negative notes is to pay all of your bills on time. Even if you think a particular bill is an error, pay it first and then deal with the company to get a refund. This way you avoid any negative marks on your file.
- Clearouts – A clearout may also be called a confirmed missing debtor. This note means that you, the person who owes money on an account, could not be found after the credit provider attempted to contact them. The provider must prove that they have made attempts to reach you in writing, in person, or over the phone to ask you to pay an outstanding debt. Once they have proven that you can not be reached they can list your account as overdue even if it has been less then 60 days. A clearout will remain on your credit file for seven full years, even if you pay the past due amount.
- Current Payment Status. A current payment status means that you have paid the past due amount on a particular bill. If you still owe money to the creditor, but it is not overdue then your will be listed as current. An example of this is your credit card bill, if you miss a payment of $50 and pay that amount you will be listed as current even if your credit card still carries a balance.
- Credit Score or Credit Rating- Your credit score is done by the credit provider who is investigating your file and not by the credit reporting agency. Each company has its own set of criteria or scoring method. This is why you may be rejected by one provider and then accepted by another. That said, it is not in your best interest to simply jump from provider to provider hoping to be accepted. All of those inquiries are also listed on your credit file and can be seen as negative.
Updating Your Credit File
When you look at your credit file you must be sure that all information is correct. If there are errors on it you will have to go through a process to get them fixed. Small errors as you would expect are easy to fix while bigger errors may require more effort on your part.
- Personal information can be updated by contacting the reporting agency online. You may be asked to provide documentation in order to make changes. If the reporting agency does not need any more information from you the process should take five working days. Should more verification be needed it may take up to thirty.
- Writ and summons or court judgement information can be updated with evidence of the payment. Once that has been done your file will be updated to say either paid in full or settled. If your writ or summons was defended you must provide a copy of notice stamped by the court for it to be removed from your file. If a judgement has been dismissed, set aside, struck out, discontinue you must also prove that in order for it to be removed from your file.
- Bankruptcy information can also be amended after you have sent in the appropriate documentation.
- Overdue account information can only be updated by the credit provider. You must contact the credit provider and instruct them to notify the credit reporting agency once you have paid off your debt. If you are unable to contact them you may contact the credit reporting agency and they will attempt to do so for you. Keep in mind that even after you pay an overdue account the status of that account will be updated but it will not be removed from your file. An overdue account, even paid off is part of your credit history.
- Credit Application information can also only be updated by the credit provider. You must contact the listed provider and instruct them to make the correction.
- Directorships or proprietorship information that is incorrect must be verified by the reporting agency. You should contact them and they will look into the note and let you know the outcome of their investigation within thirty days.
Credit History
Your credit history remains with you for a long time. This is one of the many reasons it is important to maintain a good payment status with any and all of your creditors. You may not think that the utility bill you defaulted on a couple of years ago is a big deal but you would be wrong. That bill could at worst preclude you from getting a loan or at the least raise your interest rates because you are seen as a credit risk.
- Applications for credit and overdue accounts will be on your file for five years.
- Payment defaults that were previously listed as overdue accounts are also held for five years.
- Clearouts are on your credit file for seven years.
- Bankruptcy information will remain on your credit file for seven years.
- A court judgement will be listed for five years.
- A summons or writ on your file will remain there for four years.
- Your personal information that identifies you is on your file for as long as it exists.
- Credit files are purged automatically each month to make sure that any information on them is current.
Identity Theft
If you think that you are a victim of identity theft one of the first things you should do is examine your credit file. Once you get a copy of your file you can probably see whether or not someone has attempted to use your personal information to get credit. You should act immediately to get control of this situation by taking the following steps.
- If there are credit providers on your file that you did not apply for credit from you should contact them immediately so they can investigate on their end.
- Report the crime to the police.
- Keep notes of all the above conversations including the name of the person you spoke to and their contact information. The dates you spoke with them and the details of the conversations.
The best defense against identity theft is to avoid it by being diligent about your financial information. Always know what is on your credit file and ask to be notified whenever a new application is made under your personal information. When you get new credit cards in the mail sign them immediately. Keep your cards and identification is a safe place. Do not throw paperwork away that contains personal details, shred it instead.
Credit Application Refusal
You have probably gotten a blow to your ego if you have been refused credit. It is up to credit providers alone to whom they give credit to and to whom they refuse it. It is possible to ask them why you were refused but you may get a stock answer that just says your score was not high enough or it was due to information in your credit file. If you are confused you should get a copy of your credit file yourself to make sure there are not errors. You may need to do some housekeeping and pay off old debts or fix errors before you make application to another credit company.
Your credit file is your ticket to a secure financial life. Not knowing what is in it or understanding how it works is not an excuse. Anyone who is truly interested in maintaining good standing with their creditors knows that they should not only pay their bills on time but they should also pay attention to their credit file. You should never apply for a loan or a line or a credit card without understanding how that application will effect your file. You should also be aware of what might be in your file that could cause a request to be refused. There is a great peace of mind that comes with knowing how your application will be viewed once it is sent off to a credit provider. All you have to do is request the information from the credit reporting agency.
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