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What is a credit report?

Find out what a credit report is and how it works.

18 November 2022Lloyd Smith 4 min read
what is a credit report and how it works

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A credit report is a detailed summary that is prepared by a credit bureau to show an individual’s credit history. A credit report is used to help potential credit providers or lenders assess through looking at previous bill-paying habits, whether to approve a loan applicant's credit and at what terms.

The credit report will then be the basis for the credit lender to calculate the loan applicant's credit score. A higher credit score will mean that the lender considers the consumer less risky to loan to, and the lower the score the more risky the applicant is assessed to be.

A credit report is an accumulation of information about a loan applicant’s payment and loan history, monthly debts, and other types of credit account information that assists a credit provider create a credit score that will determine whether the loan applicant is a good credit risk or bad credit risk.

It is important to note that you will have one credit score from each of Australia’s credit bureaus, or credit reporting agencies, therefore in total three scores. Credit bureaus will create the loan applicant’s credit report. The credit bureau is an organisation that collects and sells an individual’s credit information for a fee to credit providers who then can assess an individual’s suitability for a credit or loan.

The three largest credit reporting bureaus in Australia that provide credit reports are Equifax, Experian and Illion . Other lenders include employers, landlords and insurers that will also use a credit report as part of their decision-making process in assessing the creditworthiness of the applicant.

Credit reports will not contain in them whether a loan applicant is a good or bad credit risk, it will provide credit providers with the information and data to make the lender make a decision themselves.

Information that should not appear on credit reports include:

  • Race
  • Religion
  • Health (medical bills may show up as debts)
  • Criminal records
  • Income
  • Bank account balances
  • Driving records

Through the credit report the lender will calculate the applicant’s credit score through a formula that will use the information in the report. The credit score will not be a part of the report.

Credit reports include a wide variety of information including personal information, credit account information and public records such as bankruptcies. These reports also include a credit history summary that contains credit card accounts that are past due or in withstanding, and detailed account information related to high balances, credit limits, and the date accounts were opened.

Below is a breakdown of the detailed information in different sections of a credit report:

Personal information:

This section includes personal identifying information including your name, address, date of birth, employment history and drivers licence number.

Credit account information:

This section includes the applicant's different types of consumer and commercial credit accounts such as, but not limited to, credit card, mortgage, renovation loan, student loan, car loan, telephone, gas, electricity and internet. It will detail when these accounts were opened, your account balances, loan amount and payment history. It will also include overdue accounts such as defaults and serious credit infringements.

Inquiry information:

Credit inquiries are when credit lenders inquire into information present in your credit report with the goal of understanding your financial behaviour. The two types of inquiries are split into ‘soft’ and ‘hard’.

Soft inquiries are when current creditors conduct a periodic review of your accounts. Soft inquiries do not impact credit scores.

Hard inquiries are when companies review your credit report because you have applied for credit or a service. This will remain on your credit report for up to two years and can impact credit scores.


A credit report will show information about bankruptcy public records and the type and date at which it was filed. Additionally any other public record information such as court judgements, directorship details, proprietorship details will also be listed.

Collections accounts:

This section includes past-due accounts that have been passed to a collection agency. This can include credit accounts as well as accounts with banks, doctors, mobile phone providers and retail.

Reading through your credit report check that in each section all the loans and debts listed are yours and your personal details such as your name and date of birth are correct.

Your credit report will also include a credit rating which outlines the band with which your credit score sits in. This band may be graded from low, fair, good, very good, excellent.

Your credit score will then be calculated based on all the detailed information such as the amount of money you’ve borrowed, the timeliness you have paid that money back and the number of credit applications you’ve made. Each credit agency will calculate it slightly differently but generally your credit score will be between 0-1000 or 1200. The higher the score the less risky you will be considered by your lender, making you more likely to get the loan on good terms. The lower the score the more it will affect your ability to get a loan.

As credit reports have real impacts on your future loans and lending, it is important to check your credit reports regularly and keep it updated with information that is accurate and complete. Regularly checking your credit reports can help you monitor your credit accounts and enable you to identify early incorrect information, or potential suspicious activity. If you use ClearScore it automatically updates your credit report once a month from your sign-up date.

You can get a copy of your credit report for free every three months and it is recommended to get a copy at least once a year.

Get your free credit score and report from ClearScore today.

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Written by Lloyd Smith

General Manager AU

Lloyd spreads the word about how awesome ClearScore is.