Temporary Update: Credit Reporting and Covid-19
Many lenders have offered consumers mortgage relief during the pandemic. This means that some borrowers will either make reduced or no payments on their home loan for a set period of time. Usually the lender has the right to record the variation on a borrower’s credit record which is likely to affect the borrower’s credit rating.
Due to the unusual circumstances if the loan variation is as a result of the current pandemic, the loan will be recorded as up to date and no default will be listed on the borrower’s credit record.
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Information listed on a credit information file
The type of information that is listed on a credit report is limited to:
Information about defaults in consumer credit payments, court judgments and loan applications remain on a credit report for 5 years. Information about serious credit infringements remains for 7 years.
If a judgment debt is paid, and the proceedings are discontinued as required by the court rules, the judgment is set aside and the credit report updated.
Bankruptcy information remains for 5 years from the date a person is made bankrupt, or if the person's bankruptcy discharge is delayed, 2 years from the date of discharge whichever is the later date. Bankruptcy information is also recorded on the National Personal Insolvency Index, and remains there for life.
Commercial credit information is also included on a credit report if applicable. This information refers to business related credit, including applications for credit and payment defaults. There are fewer protections for business related credit compared to consumer credit, including limited notice requirements.
Accessing a credit report
Consumers are entitled to a free copy of their credit report to check their credit history and the accuracy of the information contained on the report.
The credit reporting body must provide the report to the consumer within 10 days of the request without charge unless the consumer requires the report urgently, in which case a charge may be made for the information. Be very careful of organisations that offer credit scores for free because consumers may unwittingly agree to unwanted marketing for loans or credit.
Consumers applying for credit are asked to provide an authority for the proposed credit provider to access the credit report. Any updated information, such as an address, may be notified to other creditors.
A consumer is also entitled to have entries on a credit report amended, so check the report for accuracy. Be careful of companies that offer to correct inaccurate information on a credit report (also known as 'credit washing' or 'credit repair') for a fee, because this can easily be done by the consumer without cost if the information is incorrect. View the fact sheets on the Office of the Information Commissioner's website.
Ensuring information on a credit report is accurate
Credit reporting bodies must ensure that all of the information held about a consumer is accurate, up-to-date, complete, relevant and not misleading.
A consumer can ask for information held by a credit reporting body to be corrected because mistakes occur. Correct the information by either asking the credit reporting body to correct it, or asking the credit provider to correct it (if it relates to the accuracy of default information). If the credit reporting body is satisfied that the information is incorrect, it must be updated.
If incorrect, the information must be updated within 30 days. A consumer cannot be charged by either the credit reporting body or the credit provider for correcting the information.
If payment of the debt is made by the consumer, it will show as paid but will not be removed from the report. Unless the credit provider agrees to remove it earlier, the information will remain on the report for 5 years even if it is paid in full.
If there is a dispute about the accuracy of any information held on a credit report, a consumer has the right to take the dispute to an external dispute resolution scheme, at no cost to the consumer. The credit reporting body or credit provider should provide information about its membership of the participating external dispute resolution schemes.
For more information about the approved schemes see the Office of the Information Commissioner's website.