How long does a poor credit rating last?
Your credit rating, or credit score, is based on the information shown in your credit report at a given time. Equifax gives the following timeframes for how long different kinds of information may stay on your credit report.
Credit report timeframes – Equifax
| Two years |
|
|---|---|
| Five years |
|
| Seven years |
|
*Where you can’t be contacted, a lender can immediately list the debt as a clearout and does not need to wait 60 days.
Source: Equifax.
With bankruptcy, debt agreements and personal insolvency, when you enter into an agreement and when it ends can affect how long the information is kept on file. For example, Experian says a bankruptcy will remain on your credit record for five years from the date of listing or two years after discharge, whichever is greatest. If you pay an overdue debt, it will still generally be listed on your credit report for five or seven years (depending on the type of overdue debt). However, your credit report will be updated to show you have made payments, which could help your score start to improve.
Credit repair: How can I fix my credit score?
You cannot change or remove information on your credit report that’s correct, even if it’s negative, according to Moneysmart. But, you do have the right to request that errors are fixed. This is a free service you can organise by contacting the relevant credit agency. What you can request to have fixed follows.
What can be fixed
1. Credit reporting agency errors
Examples:
- Your name, date of birth or address needs updating.
- A debt is listed twice.
- The amount of a debt is wrong.
2. Credit provider errors
Examples:
- Incorrect information about payments (e.g. that a $200 payment was overdue for 60 or more days, but it wasn’t).
- Failing to let you know about an unpaid debt.
- Listing a default (an overdue debt) when you are in dispute.
- Not showing if a payment plan is agreed, or contract terms are changed.
- Mistakenly creating an account, or having one as a result of identity theft.
Source: Moneysmart.
You can receive a free copy of your credit report once a year from credit reporting agencies such as Equifax and Experian. Separately to your credit report, you can check your credit score regularly and for free. Checking your credit score or report will not have a negative impact on your credit rating.
Moneysmart recommends being wary of paying credit repair companies that claim they can ‘clean’ your credit report and have details removed. This may not be true. The Consumer Action Law Centre says that people who use these quick-fix companies could end up receiving inappropriate debt solutions and paying high or hidden fees.
