How often do credit scores and credit reports update?

Your credit score can be an important factor in determining your eligibility for products like home loans, and it can change for a variety of reasons. If you’re thinking about applying for a loan, you may well be wondering how often credit scores update. 

Your credit score is based on personal financial information that is given to credit reporting agencies by credit providers such as banks and financial institutions, telecommunications companies and utilities providers.

There are three main credit reporting agencies in Australia – Equifax, Illion and Experian. You may have a credit report with each, but it may be different, depending on the information they have received from credit providers, and the frequency with which they update your score.

If you have recently taken out a new loan or paid off a debt, or are purely curious, you may be wondering how long it takes for your credit score to change, and what factors can affect it. Here are some important things to know.

How often are your credit score and credit report updated?

James Forbes, General Manager Consumer at Equifax, told Canstar that your credit score will change each time new information is added to your credit report. Your credit score could increase or decrease when a credit provider sends new data about your history of applications, repayments or defaults to a credit reporting agency. They typically can also notify these agencies when you change your credit limit or agree to act as a guarantor for someone. There is no set frequency with which this happens, but you may expect most to report monthly.

How is your credit score calculated?

A variety of factors can go into calculating your credit score, based on credit products you have applied for, and debts you currently have and are paying off. According to Mr Forbes, the main factors influencing your credit score can include:

• the types of lenders and credit providers that you’ve applied to and how often you make credit applications
• how much credit you have, such as how many credit cards you have, and their
• maximum limit
• existing loans for household items, personal purchases (including vehicles), or for family reasons
• your current and past debt, which will include your repayment history and if you have had problems making regular payments
• any default judgements or bankruptcies against your name.

It used to be the case that credit reports in Australia would only reflect negative events, such as late repayments and defaults. Thanks to the advent of Comprehensive Credit Reporting (CCR) legislation, your credit report will now display a more complete picture of your financial behaviour, including more positive events such as loans repaid, limits reduced on credit cards and bills paid on time.

How long does information stay on your credit report?

According to Equifax, most negative information stays on your credit report for seven years, while most positive information, including such things as closed accounts paid as agreed, stay on your credit report for 10 years.

Examples of negative information include:

• Late repayments: These will remain on your credit report for seven years, even if the amount is paid when past due
• Debts assigned to collection agencies: These will remain on your credit report for seven years, but may have less impact if the debt is paid off within that seven years
• Bankruptcies: These can remain on your credit report for ten years, depending on the type of bankruptcy
• Other negative accounts: These can include such things as repossessions, foreclosures, and can stay on your credit report for seven years

Examples of positive information include:

• Active accounts paid as agreed: Active credit accounts that you meet your repayments on will remain on your credit report as long as the account remains open and the lender reports your repayments
• Closed accounts paid as agreed: If a lender reports an account as being paid in full, it can stay on your credit report for up to 10 years after the date that the report was made.

How do you find out your credit score?

There are a number of websites that you can use to check your credit score for free, including Canstar. According to the Australian Government’s MoneySmart website, you have a right to get a copy of your credit report for free every three months.

Your credit report will list all reported transactions you’ve made with credit providers, including applications for products like credit cards or loans, and amounts of money you’ve borrowed and repaid, as well as any bankruptcies, defaults or judgments.

If you’re thinking about applying for a loan product such as a home loan, then you may be wondering about your credit score, including some of the things that can negatively affect it, and some ways you could try to improve it.

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