1. I’m a millionaire, my credit score should be perfect

Your credit score is based on the information in your credit file and unfortunately, your income, investments and assets are not recorded as part of your credit file. Having a great credit score isn’t about how much money you have, it’s about how good you are at handling credit.

2. I’ve paid off my loan so it shouldn’t affect my credit score anymore

Not quite. An enquiry will stay on your credit file for 5 years. It will remain on your file regardless of whether your application is approved or rejected and does not indicate if the product was ever taken out, is still active or whether it has been paid off or not.

3. All my bill repayments are being reported to the credit reporting bodies

Sending your repayment history to the credit reporting bodies is optional for lenders and some have only just begun to do this. So we’re still in a transition period and it will take some time for all your bill repayments to start filtering through to your credit file.

Further to this, only providers with an Australian Credit Licence can record your repayment history on your credit file. So, paying your phone and electricity bills won’t be counted on your credit report.

4. A bankruptcy will affect my credit score forever

Nope. A bankruptcy may be listed on your credit file for whichever of the following periods ends later:

a. 5 years beginning the day on which you become bankrupt; or b. 2 years beginning the day your bankruptcy ends

Once the bankruptcy is removed from your credit file, it will no longer affect your credit score.