Why you have no credit history yet
Australia has two main credit reporting bodies, Equifax and Experian. They keep a credit report on you: your credit cards, loans and other credit, and whether you’ve repaid on time. They can also give you a credit score.
Under comprehensive credit reporting, your report shows good behaviour too: for each credit product you’ve held in the last two years, it records each repayment and whether you paid on time. If you’ve never had credit, there’s nothing to show yet.
What doesn’t help:
- Phone, internet and energy bills don’t add a repayment history, but an unpaid one can be listed as a default.
- A debit card spends your own money, so there’s nothing to report.
Step 1: Check your credit report free
You can get your report free once every three months from each body, and also if you’ve been refused credit in the last 90 days. The two may hold different information, so ask both:
- Equifax: 138 332
- Experian: 1300 783 684
Step 2: Your first credit
- A low-limit credit card in your name, used for one small regular bill and paid in full each month.
- A small personal or car loan, if you need one anyway, repaid on time.
You don’t need much. One account, managed well for a year or two, gives lenders a clear picture. Keep the limit low: when you later apply for a home loan, lenders count your whole card limit as if you’d used it.
Step 3: Repay on time, every time
- Set up a direct debit for at least the minimum, or the full balance.
- A payment is counted as missed if it’s more than 14 days late, and your report shows how many months behind you were.
- Pay phone and energy bills on time too. They don’t build your history, but a debt of $150 or more, overdue for 60 days or more, can be listed as a default after the provider sends you notices.
How long things stay on your report
- Hardship arrangements Not used to work out your score
- 1 year
- Repayment history Each month: on time or how late
- 2 years
- Credit applications Each one, with the type and amount
- 5 years
- Defaults Even after you’ve paid them
- 5 years
- Serious credit infringements A lender can’t contact you and believes you won’t repay
- 7 years
Checking your own report or score isn’t recorded as an application. Bankruptcy and debt agreements are listed for at least 5 years.
Court judgments also stay for five years. Bankruptcy stays for the later of five years from when you became bankrupt, or two years from when it ended.
Mistakes to avoid
- Missing repayments. Each month you’re behind shows in your repayment history for two years.
- Applying for lots of credit. Each application is recorded for five years, and lots of them in a short time can lower your score.
- Ignoring an unpaid bill. A default stays for five years, even after you pay it.
- Paying a credit repair company. You can check your report and ask for mistakes to be fixed yourself, free.
Learn more
See credit scores explained for what lenders look at, how to make a budget so you can repay on time, and why checking your own score never lowers it.