How does credit reporting work in Australia?
Credit reporting is the sharing of information between credit providers, such as HSBC, and credit reporting bodies like Equifax, Experian and illion. This information is stored on a credit report and has information about the lending products you have, like credit cards, personal loans, home loans and overdrafts. Providers of other types of credit, such as phone, internet and utility providers, can also take part in credit reporting.
What is Comprehensive Credit Reporting?
Credit reports include both positive and negative information about the credit history of Australian consumers. This is known as Comprehensive Credit Reporting (CCR) and is meant to provide a more complete picture of a customer's situation and help credit providers to match their products and services to a customer's individual needs.
Payments made on time will have a positive impact on your credit score while late or missed payments may have a negative impact. All of these payments will appear on your file for 24 months.
You can find more information about Comprehensive Credit Reporting on the Australian Retail Credit Association's (ARCA) CreditSmart website.
What sort of information is shared?
Information shared about your credit worthiness includes:
- The type of each credit account you hold (such as credit cards, personal loan and home loan accounts).
- The date you opened and/or closed your account/s.
- Your credit limit.
- Your repayment history.
- Your credit inquiries (when you applied for credit).
- Credit infringements (such as payment defaults).
You can contact one of the credit reporting bodies mentioned above and get a free copy of your personal credit file once per year.
Credit reporting bodies in Australia
Why does HSBC collect and use my credit information?
We may collect, use and disclose credit information received from a credit reporting body for a number of reasons:
- to ensure we are lending responsibly
- to assess your creditworthiness and risk of default
- to assist us with the ongoing management and monitoring of your account
- for debt collection purposes
- for product development and research purposes
For further details about how and why we collect, use and disclose your personal credit information, please refer to our Credit Information Management Policy.
How does credit reporting during financial hardship work?
From 1 July 2022, information about financial hardship arrangements can also be included in a credit report. The credit report can show that a financial hardship arrangement has been entered for a credit account, but it will not include the reason or details of the hardship arrangement. This information will only remain on your credit report for 12 months (compared to 24 months for regular repayment history reporting).
A credit reporting body is not allowed to include financial hardship information when calculating your credit score.
Will payment arrangements be recorded on my credit file?
If you enter into a formal financial hardship arrangement, the terms of your credit contract will be varied and confirmed in writing. During this time, your repayment history will show whether or not you met the requirements of the financial hardship arrangement instead of your usual payment obligations.
This can be a good thing as it can help you to avoid having missed payments recorded on your credit file. However, if you can't meet the terms of the new repayment arrangement, overdue repayments will be listed on your personal credit file.
It's important to know that financial hardship arrangements will not override your previous repayment history or clear existing overdue repayments.