How to fix your credit file

How to fix your credit file

By Kerri Jackson. Posted 15 July 2019. Categories: Credit Score Bootcamp.

In this session of Credit Score Bootcamp, we look at why it’s really your credit file that’s important and what to do when things go wrong.

What’s more important: credit score or credit file?

For lenders your credit file will generally have more influence over your loan application than your credit score. Your file contains the detail of your credit history, while your score sums up that detail in one number. Your credit score is most useful to you in the first instance as an indicator of the health of your credit file.

What’s a hard credit check as opposed to a soft check?

A soft check is not recorded on your credit file and a hard check is recorded on your credit file, and may therefore impact your credit score. Some examples of when a soft check could be made would be for quoting purposes or by employers as part of background checks on potential employees. A hard check is made when you are asking for approval for a type of credit.

What is a default? 

A default payment is an amount owing of more than $150 that has been overdue for more than 60 days, where you’ve been notified of the consequences of not paying and efforts have been made to recover the amount. If you repay the amount after defaulting, your credit file will be updated to reflect that the debt has been paid, but the default remains on your file for five years, unless an investigation proves the default was an error.

How long does it take for my file information to be updated? 

This may vary, but a credit provider has 45 days to update information with the bureaus. If you make a complaint or request to have data changed with a credit provider, they should notify you within five days whether or not they will change the data. If they determine the data should be changed, they then have 30 days to update that information with the bureaus.

I think there’s an error in my credit file, what can I do?

Contact the bureau from which you received your file, notify them and supply them with any supporting documentation. They will investigate with the credit provider. This should take no longer than five days to determine if the information can be changed and no more than 30 days to make the change if one is required.

I think I’m a victim of ID fraud, what should I do?

If you think someone is using your identity to open credit accounts in your name, you can ask credit bureau to suppress or freeze your report. This means no credit information can be supplied to creditors, and should mean no new accounts can be opened in your name.

Anyone can apply for a 10-day freeze, but must apply to the credit reporter (credit bureau) should you require that period extended.

You should also note that this action does NOT prevent fraudulent activity on existing accounts - such as someone stealing and using your credit card details. It only prevents new accounts being taken out in your name.

IDCare is an excellent source of information on protecting against identity fraud, how to tell if you’re at risk, and what to do if you think it’s happened to you.

Up next in Credit Score Bootcamp:

Five credit score myths busted

Read more:

Nine ways to improve your score

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