Many people do not know that if you've ever taken out or even applied for a loan or a credit card, or if you've defaulted on a bill, then you have a credit file. Most of my clients are also very surprised to find out that every time they apply for credit, the credit provider makes an enquiry, and these enquires are then recorded on their file.
If there are too many enquiries on your credit file, this can actually count against you on the personal “score card” that most lenders have developed. In fact even if it's just you asking for your own credit history, this can still count against you if you have too many enquiries in a short space of time.
So you can see it's truly a sleeping giant.
The reason that lending institutions count the number of enquiries on your file is that they want to be sure that you're not applying for credit all over the place. So if you've been trying to raise finance via a number of lenders, it pays to let your mortgage broker know in advance.
If you need to check out your credit history you can do so at www.mycreditfile.com.au.
You can get a copy of your credit file in one working day by fax or email for $32.95 including GST. Or you can get it free in the mail within 10 working days. But please remember that every time you order a copy it could count against you.
You can also sign up for a credit alert, which will email you when changes to your credit file are made. This can help alert you to any possible identity theft by helping you keep track of when your identity is used to apply for credit. In fact, a colleague of mine had a client whose loan was declined just the other day, only to find that someone had stolen her identity. So it does pay to be careful.
It's not every day or even every month that someone will be turned down for a loan because they have too many enquiries on their file. But just like when you lose points off your licence, it can take years to get your credit rating back in shape.
Another thing to be mindful of is sometimes if you have a common name then enquiries for people with a similar name can be added to your record by mistake and if this can be proven these can be removed from your record.
We've been able to help our customers sort out problems with their credit history, and we can also keep down the number of loan applications that they make because we can recommend a suitable home loan upfront.
If you do need to get your credit file within 24 hours, we can get it for just $10 – which is a bit of a saving. Every little bit helps.