Protect Identity Secure Credit Rating

cars, utes

Hansy Mannil Jul 10, 2023

According to the Australian Bureau of Statistics' 2007 Personal Fraud Survey, identity fraud has become the fastest growing crime in Australia, with half a million victims in the past 12 months at an estimated cost of $1 billion to the economy.

Your identity is the key to your credit rating - keep that key safe with our tips for protecting your identity. Most of us don't even think about our credit files until we're applying for finance, but your credit file is one of your most valuable personal assets. Although you can access your credit file, you never own it.

What is a credit file and a credit rating?

Equifax is the main credit reporting agency in Australia, and holds credit information about most Australians (your "credit file"). If you've ever applied for a loan, signed up for a credit card or even opened a post-paid mobile phone account you most likely have a credit file.

Your credit file includes information about any credit activity in the last seven years, including:

Date(s) of application
Your role as an applicant - personal, joint or guarantor
Name of the company you applied to
Amount of money sought
Type of credit and the purpose

It also contains your personal details and additional credit information including:

Records of some current credit accounts
Overdue accounts and payment defaults
Bankruptcy Act information, court judgements, writs and summons
Public record information such as Directorships and Proprietorships

Lenders can access all the information in your credit file. The information contained in your credit file determines your "credit rating", as seen by the lender when assessing you for a loan approval.

Standard defaults remain on file for five years, and bankruptcy stays on file for seven years, but these are not the only things that might influence a lenders decision. Lenders may consider the number of credit applications you have made recently, the number of addresses shown in the last five years, and even the suburb you live in!

Protect your credit worthiness

Your credit is an asset to be protected. Invest in your credit worthiness by:

Paying your bills on time

Often billing disputes concern amounts of money less than $500.

In most cases, it's better to pay the bill and resolve the dispute afterwards (in the small claims court if necessary). You can also advise Veda Advantage that an amount is in dispute, preventing it as being listed as a default while the dispute process is in progress.

Contacting credit provider(s) if you anticipate any problems meeting your commitments

Whether it's an unexpected illness, a banking error or a simple oversight, you should contact any credit providers if you believe you may have trouble meeting your obligations. This includes anyone who provides you credit, such as utility and telephone companies. Your call could prevent a credit file black mark. Keep communicating!

Controlling your credit applications

All too often people find themselves unexpectedly struggling to obtain a loan because their credit file shows a large number of applications for credit in a short space of time. Sometimes this occurs because they have innocently applied with multiple institutions simultaneously, but it can also be due to them falling victim to a less-than-transparent broker that has "shopped" their application to a range of different lenders without consent. Either way, a large number of credit applications in a short space of time is generally frowned upon by lenders, so it is important to apply for finance selectively, and ensure you deal only with reputable and experienced finance brokers. For more information, see our article on Comparing Car Finance Brokers.

Protect your identity

Your identity is the key to your credit rating and your potential to purchase. Protect your identity by:

Minimising your risk of identity theft

Take these simple steps to minimise your chances of identity theft:

Sign credit and store cards as soon as you receive them
Take care to secure your drivers licence, passport and other important personal documents
Contact your financial institution if your cards, account details or PINs are lost, stolen or accessed

In the event of suspected identity fraud, contact police and your financial institutions immediately.

Checking your credit file regularly

You should check your credit file regularly to ensure that the activity listed matches your actual activity. For many victims of identity theft, unexpected activity on their credit file is the first sign that their identity has been stolen.

A free copy of your credit file can be obtained by mail or fax. Alternatively, you can obtain a copy of your credit file instantly online for a cost of $32.95. Veda Advantage also offers a credit monitoring service for $42.95 per year. This service will alert you every time your credit file is accessed or altered click here to find out more about Veda Advantage's My Credit File services.

Find out more

While a clean credit file is beneficial when applying for finance, a few blemishes doesn't mean disaster. For more information on preparing for your next car finance application call us on 1300 STRATTON (1300 787 288) or send a quick online car finance enquiry.

stratton disposes of all personal information securely. Information kept on file is secured electronically.