The unexpected factors that can affect your credit history

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What unexpected factors can impact your credit score?

Do you have a clean credit file? You might think that you do, but without getting an Equifax credit history check, you won't know for sure. There could be some unexpected factors lingering in your file from years and years ago - factors that you thought wouldn't even count toward your credit score.

What factors do end up on a credit history, and how could they affect your ability to take out a loan in the future? Read on to find out.

More than just debt

According to the Office of the Australian Information Commissioner (OAIC), something as simple as your loan repayment history can have a lasting impact on your credit score1. It is your repayment history information, or RHI, that ends up on the credit report, although no specifics are recorded1. For example, the amount of money that you did not repay will not show up, only that you missed a payment1. You are considered to have missed a payment if you have not paid the full amount 14 days after the due date1.

Paying your invoices on time will help to keep your credit score intact.
Paying your invoices on time will help to keep your credit score intact.

Your RHI can only be recorded on your credit file if it is related to a line of credit from a licenced provider, however, such as a mortgage repayment, student loan or credit card balance1.

SRG Finance outlines some other negative credit information that can appear on your credit file - these include utilities accounts, like gas and power; bankruptcies and corporate insolvencies; payment defaults (that also include your RHI); any directorships you've had; and credit applications or enquiries from the past five years2. There's far more than just bad debt that ends up on your credit file, and making sure you're on top of repairing it is vital to your financial future.

There's far more than just bad debt that ends up on your credit file.

Failure to fix a poor Equifax credit score could hold you back from buying property because you could be rejected by mortgage brokers and banks for a home loan if they check your credit report as part of their lending criteria. Some personal loan providers are far less likely to give you what you want for that family holiday you've been planning. Repairing your credit score doesn't have to be a difficult task.

How is my credit score calculated?

A credit score from Equifax, or an Equifax Score, is calculated based on information on your Equifax credit file at a point in time, and gives a score between 0 and 1,2003. The higher the score the better, and the less likely you are to have to pay elevated interest on a loan3.

The average Equifax Score in Australia is 749, but a reasonable Equifax Score can be as low as 6222. If you don't regularly check your credit score, you won't notice when something goes wrong (even if it's a mistake) and your credit score may be low until you get a report and work on repairing it3.

Something as simple as enquiring at lots of credit providers for the best deal can impact the likelihood that you'll be accepted by another provider4. Businesses will be less likely to open a line of credit with you if you look like you are in financial stress making lots of credit applications in a short space of time.

Shopping around for the best deal should be reserved for consumer items to protect your credit report.
Shopping around for the best deal should be reserved for consumer items to protect your credit report.

If you do find that you have a poor Equifax Score, you can work on repairing it. If there is an error on your Equifax credit report, you need to inform the credit provider responsible for that listing, who will be able to investigate the error and amend it as necessary2.

If you're unsure what your Equifax Score is, or if you keep getting rejected by credit providers, there's probably an underlying reason. Make sure you get a copy of your Equifax credit report today.

Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstance before acting on it, and where appropriate, seek professional advice from a finance professional such as an adviser.

1Office of the Australian Information Commissioner, Could my loan repayment history affect my credit report? Accessed November 2016.

2SRG Finance, The Biggest Factors That Affect Your Credit Rating. Accessed November 2016.

3Equifax, How is my Equifax Score calculated? Accessed November 2016.

4Equifax, What looks bad on my credit report? Accessed November 2016.

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