Do you know what’s in your credit file?

When assessing a loan application, lenders look at your credit file to help determine your suitability.

However, very few Australians actually know what’s in their credit file and how it could impact their future lending goals.

Here are the top three reasons why you should check your credit file.

1. Plan around your credit score

If your credit history is less than perfect, it could reduce your lending options. The strict assessment criteria of many traditional lenders means they often won’t consider an applicant with credit issues.

Checking your credit file before applying for a loan allows you to engage with a more flexible lender from the get-go.

This avoids unnecessary ‘hits’ (notations made by each lender a credit application is made with) on your credit file, which could further deteriorate your credit score.

2. Ensure there are no mistakes

Let’s be honest – sometimes mistakes happen. In some instances, credit files have been found to have errors, from small mistakes such as an incorrect name, through to inaccurate records of unpaid defaults.

So, it’s a good idea to regularly check a credit file to ensure there are no mistakes that may impact an application.

3. Determine the application timing

Knowing the cause of poor credit history might mean it makes sense to delay any applications. Credit enquiries, defaults, clear-outs, and court judgements remain on a person’s credit file for five years.

If you have a default listed on your credit file that is due to drop-off in three months, it might be worthwhile making the application after the default is removed.

How to access your credit file

Anyone can go online and request their file from a credit reporting body, and it won’t appear as a ‘hit’. You can access your credit file for free once every three months.

If your credit file isn’t what you were hoping for, there could still be options available.

To explore the next steps in your lending journey, speak with a Liberty Adviser today.