How Long Does Credit Information Stay on File?

May 11, 2017

How Long Does Credit Information Stay on File?

Many Australians don’t think about timing when applying for a home loan. Instead, they submit an application and then they hope for the best. And yet, if you have a poor credit history, then being strategic can ensure home loan approval. Consequently, reviewing your credit file before applying for a home loan allows you to determine the right timing for you.

What Information is Kept on My Credit File?

Your credit file contains a lot of detailed personal and financial information about you. The main facts that your file includes are as follows:

  • Identification information – Personal information such as your driver’s license number, name, date of birth, address and employment history are all on file.
  • Credit applications – When you apply for credit, this information stores on your file. An application can be for loans, credit cards, and credit contracts such as phones, electricity, gas and the internet.
  • Consumer credit accounts – Any accounts that you hold, which are open, list on your credit history. Plus, any accounts you have held in the past are noted as well. Details of these accounts typically include the account type, and the open and closing dates, along with the credit limit.
  • Repayment history – All repayments you’ve made on mortgages or credit and store cards list, along with the minimum amount required.
  • Defaults – Serious credit infringements and overdue payments list, along with court judgements, bankruptcy and personal insolvency, or other debt agreements.
  • Business details – If you’re a director or proprietor and hold an Australian Business Number (ABN), then these details store on file.

How Long Does this Information Stay on File?

Depending on the type of data, information remains on file for a lifetime or between two and seven years. Let’s look at the durations, so you can determine when the best time is to apply for a home loan.

  • Lifetime – Your address, name and other personal identification information stores on file for the duration of your life.
  • Two years – All of your repayment history details.
  • Five years – Credit inquires, overdue account payments and defaults. Along with overdue accounts listed as clear-outs, writs and summons and court judgements.
  • Seven years – Any overdue accounts considered as serious credit infringements such as bankruptcy and personal insolvency.

However, the duration for holding information on your credit file may vary. For instance, consumer credit accounts with a provider stay on file for two years after closing or terminating the account. So, the information is on file during the time of holding the credit, plus two years after closing the account. In addition, if you’ve declared bankruptcy, then this information is on your file from the time of your agreement.

It’s also important to note that overdue debts remain on your credit file for the duration specified above. Furthermore, they remain on your credit file even after they’re paid. Although, your credit file should list the time of payment for these outstanding debts. If the overdue debt is a serious credit infringement though, this remains on file for seven years before removal.

Any overdue debts, outstanding loan repayments and declined loan applications will have a negative impact on a home loan application. This information includes any application for finance that was not approved. Thus, it’s important to apply for only one loan, not numerous to increase your chances of gaining approval.

So, to increase your chances of home loan approval, get a copy of your credit history. Next, review your file. If you have a blemished history, determine when information removal from you file should occur. Then, wait until this time to apply for a home loan. Of course, while you’re waiting you can save more towards your deposit.

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