Understanding your Equifax score

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Your Equifax Credit Score is a summary of your credit information held by Equifax. Finance and Utility providers may take into account your Credit Score when you apply for credit.

 

Your Credit Score is derived from information held on your Credit Report. Your Equifax Credit Score will be a number between 0-1200. In simple terms, the higher your Equifax Score, the better your credit profile and the lower a credit risk you are.

There are a number of key contributing factors that are taken into consideration when generating your Equifax Credit Score.

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Your credit report is a comprehensive document that reflects your credit history and behaviour. It includes details about past credit applications, your record of repaying various debts like credit cards, personal loans, and mortgages—even if there were modifications in repayment arrangements due to financial hardship. Additionally, it may contain public information, such as court writs and judgments related to bankruptcies, personal insolvencies, and debt agreements.

Anyone with a credit history is entitled to access their credit report. This report is compiled using data supplied by credit providers along with information from public records.

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Understanding Your Credit Report

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Your credit report is a comprehensive document that reflects your credit history and behaviour. It includes details about past credit applications, your record of repaying various debts like credit cards, personal loans, and mortgages—even if there were modifications in repayment arrangements due to financial hardship. Additionally, it may contain public information, such as court writs and judgments related to bankruptcies, personal insolvencies, and debt agreements.

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Anyone with a credit history is entitled to access their credit report. This report is compiled using data supplied by credit providers along with information from public records.

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What goes into a Credit Report?

 

In your Credit Report you will find information about your history with credit. Your Credit Report is divided into a number of sections:

 

Personal information / identity details

This includes information like your name, date of birth and names you may be also known as. It also includes your driver’s licence number, as well as a list of places you have worked and addresses where you have lived or operated a business from.

 

Consumer credit information

The consumer credit information section includes:

 

Details of credit enquiries that have been made on you by a credit provider when you have made an application for consumer credit. Consumer credit relates to loans for household or family purposes as well as for the purchase, renovation or re-financing of a residential investment property. Well-known types of credit include credit cards, mortgages, personal loans, car loans and credit contracts. (Credit contracts are typically used by businesses – such as utility providers and telecommunications companies – that provide a good or service upfront and get paid for it at a later date.) The ‘buy now pay later’ store finance and store cards many retailers offer are also a type of credit.

 

Consumer credit liability accounts

 

This may be an account that you currently have open or have had open in the past. Your Credit Report may include information about the type of consumer credit liability account you had or have, as well as its credit limit and open and/or close date. Please note that not all credit providers supply consumer credit liability information to credit reporting bodies (such as Equifax).

 

Monthly repayment history

 

On credit accounts such as mortgages, personal loans and credit cards. This reflects whether you have paid the minimum amount required on time each month or not. It will also include information on any defaults or financial hardship arrangements in relation to your accounts. Please note that not all credit providers supply repayment history information to credit reporting bodies (such as Equifax).

 

Overdue accounts

 

Such as defaults, new arrangements on your defaults as a result of financial hardship and serious credit infringements

 

Public record information like:

Court judgements

Directorship details

Proprietorship details

Bankruptcy, debt agreement and personal insolvency

 

Commercial credit information
This is information about credit enquiries that have been made on you for commercial credit. Common types of commercial credit are a work-mobile-phone contract, business loan and business credit card. It also includes details of any overdue commercial credit accounts and other debts.

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File access information
This is information about third parties that have accessed your Credit Report. These third parties may include brokers, credit repair agencies and Equifax. (For instance, if you request a copy of your Credit Report from Equifax, the fact that Equifax has accessed your Credit File in order to provide your Credit Report will be noted.)

 

Understanding a Credit Enquiry

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A credit enquiry is a notation that might appear on your Credit Report when a lender performs a credit check during your application for credit. This notation is recorded as a 'credit enquiry' on your report.

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The details of a credit enquiry may encompass the date of enquiry, the specific type of credit you've applied for (such as a personal loan, credit card, mortgage, or phone contract), your status as a sole or joint borrower (including if you're acting as a guarantor for someone else's loan), and the amount you've applied for.

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Do credit enquiries effect your credit score or status?

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The type of credit applied for, the amount of credit and the number of credit enquiries over a period of time can all have an impact on your Credit Report.

 

Are enquiries good or are they seen as negative?

 

Many people are unaware that shopping around can negative consequences where credit is concerned. If you make several credit applications in a short space of time, this may be seen as a sign you are in financial difficulty and have a negative impact on your Credit Report and Credit Score.

 

Did you know....? Many applications in a short space of time can be an indicator of credit stress.

 

What is repayment history?

 

As the name suggests, your repayment history is a record of when you have paid your minimum monthly repayments on your credit cards and loans. Whether you meet your minimum monthly repayments on your credit card and loans each month can be recorded on your Credit Report as repayment history.

 

The repayment history information section of a credit report includes whether your minimum monthly repayments have been made on time or how many days overdue the payment is.

There is a 14-day grace period before an overdue monthly payment can be reported by a credit provider and included as part of the repayment history section of your Credit Report

 

Regularly making your minimum repayments on time each month is a good way to demonstrate good credit behaviour. While one late repayment, depending upon how late the payment is, is unlikely to significantly impact your credit worthiness, a number of late payments could be an indication you are in financial stress and may negatively impact your Credit Report.

 

Repayment history information is recorded on your Credit Report for a period of two years. From 1 July 2022, we will also display hardship flags for applicable accounts under the Accounts, Repayment History and Financial Hardship Information section of the credit report, including the following:

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Temporary relief / deferral Financial Hardship Arrangement (FHA)

Payment obligations are temporarily reduced or deferred as a result of a financial hardship Variation Financial Hardship Arrangement (FHA).

 

 

Variation Financial Hardship Arrangement (VHA)

A variation made to the terms or conditions as a result of a financial hardship arrangement. The repayment history will be measured against the new payment going forward.

 

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Understanding Defaults: What You Need to Know

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A default, commonly known as an overdue debt, is categorized into two main types: consumer payment defaults and commercial payment defaults. These defaults can have long-term impacts on your creditworthiness, so understanding how they work is essential.

Consumer Payment Default

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A consumer payment default is a debt equal to or greater than $150 that has been overdue for more than 60 days. It can be reported by a credit provider and recorded on your Credit Report.

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For instance, if you have a mobile phone bill of over $150 that was due more than 60 days ago, your phone company can list it on your Credit Report as a payment default.

Before this listing occurs, the credit provider must follow a specific procedure. They must send you two distinct written notices to your last known address. The initial notice is a final request for payment, followed by a warning that the overdue payment will soon be listed with a credit reporting body (like Equifax).

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Commercial Payment Defaults

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In the context of commercial credit, a default is a debt of at least $100. Before reporting a commercial default, commercial credit providers (or their agents) must send you a notice to your last known address, stating their intent to report the default amount with a credit reporting body (such as Equifax).

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The Impact of Defaults

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Having a history of overdue accounts may lead potential credit providers to view your application unfavorably. To maintain your creditworthiness, strive to avoid defaults by making repayments and paying bills on or before their due dates.

Keep in mind that both consumer and commercial payment defaults may linger on your credit report for five years—even if the overdue amount is paid in full. Once a default is paid, its status is updated to 'paid', which lenders may regard more favorably, but it still remains a part of your credit history.

 

If there's a new arrangement related wholly or partially to any of your defaults, it will be reflected in the Overdue Accounts section of your credit report.

Additional Resources

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Understanding Serious Credit Infringements: 

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A serious credit infringement is a significant concern in the realm of consumer credit. This term specifically refers to a situation where a consumer has an overdue debt and has left, or seems to have left, their last known address without paying the debt or informing the credit provider of a new or forwarding address. If there has been no contact between the consumer and the credit provider for six months or more, despite the credit provider's efforts to reach them, a serious credit infringement may be listed on the consumer's credit report.

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The consequences of a serious credit infringement are substantial. It will remain on your credit report for seven years from the date it's listed. If the amount is paid, the status reverts to a default, and it will then stay on the credit report for five years. However, the record that an amount has become overdue and subsequently been paid will persist as part of your credit history.

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Having a serious credit infringement on your credit report can have long-term implications for your creditworthiness and ability to obtain credit in the future. Being aware of what constitutes a serious credit infringement and taking steps to avoid it can play a crucial role in maintaining a healthy financial standing.

 

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Varied Timeframes

 

Some information may have varying timeframes:

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Consumer Credit Liability Information: This will be held for the length of the loan plus two years after the account has been terminated or ceases to exist.

 

Bankruptcy, Debt Agreements, or Personal Insolvency Agreements: The length of time this information remains on your Credit Report could differ depending on when these legal agreements were entered into and when they end.

 

Understanding these timeframes can be vital in managing your credit health, as it gives you insight into how long different pieces of information may affect your creditworthiness. If you have concerns or need clarity on any of these items, consulting a credit professional may be a wise course of action.

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Understanding the Lifespan of Information on Your Credit Report

The duration that information remains on your Credit Report varies based on the type of data:

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Permanent Information

 

Your personal identity information—including your name, date of birth, gender, driver's licence, and address history—stays on your Credit Report for its entire lifespan.

Specific Timeframes for Other Information

 

One Year: Arrangements related to financial hardship repayments.

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This all depends on the type of data. Personal identity information including your name, date of birth, gender, driver’s licence and address history is held for the life of the credit report.

For other information on your Credit Report, here are some of the typical timeframes.

One year Financial hardship repayment arrangements

 

Two years Repayment history information

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This consumer credit liability information can be held for two years after the account has been terminated or ceases to exist. This means that the account information will remain on file for the length of the loan plus two years. Similarly, if you are bankrupt or have a personal insolvency agreement or debt agreement the length of time this information remains on your Credit Report could vary depending on when the bankruptcy, debt agreement or personal insolvency agreement was entered into and when it ends.

 

Two Years: Repayment history information; Consumer credit liability information (held for two years after an account has been terminated or ceases to exist).

 

Five Years: Credit enquiries; Overdue accounts marked as payment defaults or clearouts; Writs and summons; Court judgments.

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Five years Any credit enquiry Overdue accounts listed as a payment default Overdue accounts listed as clearouts Writs and summons Court judgments

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Seven Years: Serious credit infringements.

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Seven years Serious credit infringements For some information the timeframe will vary.

Information about consumer credit accounts you have with credit providers is known as consumer credit liability information.

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Understanding your Equifax Credit Score

 

Your Equifax Credit Score is a summary of your credit information held by Equifax. Finance and Utility providers may take into account your Credit Score when you apply for credit. Your Credit Score is derived from information held on your Credit Report. Your Equifax Credit Score will be a number between 0-1200. In simple terms, the higher your Equifax Score, the better your credit profile and the lower a credit risk you are.

There are a number of key contributing factors that are taken into consideration when generating your Equifax Credit Score:

 

Type of credit provider.

 

The type of credit provider making an enquiry on your Equifax Credit Report (that is the type of credit provider you’ve applied for credit with) may impact your Equifax Credit Score. For example, there may be different levels of risk associated with approaching a bank, store finance provider, hire-purchase and utility company for credit. What’s more, research shows that there’s a different level of risk associated with lenders in particular industries. For example, a non-traditional lender may have a different level of risk than a bank or credit unio

 

Both the type of credit and size of the loan or credit limit you have applied for in the past can have an impact on your Equifax Credit Score. For example, mortgages, credit cards, personal loans and store finance may carry different levels of risk
 

Number of credit enquiries and shopping patterns. Every time you apply for credit and a credit provider obtains a copy of your report, an enquiry is added to your credit report. This can include any loan, mortgage or utilities applications you may make. Shopping around for credit and applying to a number of different credit providers within a short space of time may negatively impact your Equifax Credit Score. It flags you as a greater risk than infrequent applications for credit with a few credit providers
 

Directorship and proprietorship information

 

Directorship and proprietorship information on an Equifax Credit Report may impact your Equifax Credit Score. If you’re a director or a proprietor it’s important to check the individual and commercial sections of your credit report
 

Age of credit report.

 

The date your Equifax Credit Report was created may impact your Equifax Credit Score. For example, a relatively new file may indicate a different level of risk than an older report
 

Pattern of credit enquiries over time.

 

The spread of activity over an Equifax Credit Report’s life to date can have an impact on your Equifax Credit Score. For example, a relatively new credit file with many enquiries may represent a different level of risk than an older file with only a few credit enquiries
 

Your personal details.

 

Your Equifax Credit Score takes into consideration personal circumstances, such as age, as well as ‘stability factors’, such as how long you’ve been employed in your current position and how long you’ve resided at your current residential address, to help assess credit risk
 

Default information. Default information on your Equifax personal or business Credit Report, such as overdue debts, serious credit infringements or clearouts, may negatively impact your Equifax Credit Score. On the other hand, a lack of default information in your file may positively affect your Equifax Credit Score
 

Court writs and default judgements. A court writ or default judgement on an Equifax Credit report is an indicator of increased risk and may negatively impact your Equifax Credit Score. On the other hand, a lack of court writ or default judgement information would indicate a reduced level of risk
 

Commercial address information. Information such as location and the length of time you have resided at your current business address is a measure of stability and may impact your Equifax Credit Score

 

It is important to note that the way the Equifax Credit Score is used in practice by lenders may differ to the way it is displayed in the Equifax Credit and Identity portal. Each lender may also apply their own lending criteria and policies, and in some cases their own scores, which is why some lenders may approve your application while others will not.

 

What are Equifax Credit Score contributing factors?

 

Contributing factors are the items on an Equifax Credit Report that impact the Equifax Credit Score at a point in time.

 

To further understand defaults and how they can affect your financial life, you may find helpful information on websites like CreditSmart and MoneySmart. Being well-informed can help you navigate these complex aspects of credit and protect your financial future.

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Credit Reporting Authorities

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Make sure you access the same credit report the bank or lender are checking. Equifax, Illion & Experian are the only reputable CRA’S (Credit Reporting Authority’s) in Australia.

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As the leading provider of credit information and analysis in Australia your Equifax Credit Report and Score is the one that matters most.

 

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