How to fix a mistake on your credit report

Can I fix a mistake on my credit report myself?

Yes, and it costs nothing. Moneysmart says you have a right to have errors on your credit report corrected and that you do not need to pay a credit repair company to clean them up. The OAIC sets out the process, and it is more straightforward than most people expect.

Mistakes matter because lenders judge a file at a glance. A default that is not yours, a debt listed twice or an old address that muddles your identity can cost you an approval or push you towards a worse option. Spending an evening on corrections before you apply is usually time well spent.

What kinds of errors turn up?

Moneysmart lists common examples, and they fall into two groups.

Mistakes from the reporting body:

• A wrong name, date of birth or address.
• The same debt listed twice.
• A wrong amount.

Mistakes from the lender:

• Overdue payments reported incorrectly.
• A debt shown as unpaid when it has been settled.
• A default listed while a dispute was still being resolved.
• A payment plan that was never recorded.
• An account opened by mistake, or through identity theft.

Also check for accounts or enquiries you do not recognise. If you have not yet seen your reports, begin with our guide on how to get your free credit report. The OAIC says you can get one free copy every three months from each credit reporting body, and a free copy if you were refused credit in the past 90 days.

How do I get an error corrected, step by step?

1. Identify the exact problem. Note the account, the date, the amount and what the report says compared with what is true.
2. Gather evidence. Statements, payment receipts, emails, a settlement letter or a hardship agreement. Keep copies.
3. Choose where to start. The OAIC says the credit provider is the most efficient route for most corrections, and you can also contact any credit reporting body. If the one you approach cannot help, it must consult the others to complete your request.
4. Put it in writing. Describe the error, attach evidence and ask for a written response.
5. Watch the clock. The OAIC says that if the information is agreed to be wrong, a reasonable-steps correction must happen within 30 days, or a longer period you agree to.
6. Expect notice. A written notice about the correction should go to you and to anyone the information was disclosed to.
7. Check the result. Order a fresh report to confirm the change. The OAIC says a correction entitles you to a free copy.

Keep a simple log with dates and names for every phone call. It makes any later complaint far easier.

What if the credit provider or reporting body says no?

They are allowed to refuse if they are not satisfied the information is wrong, but they cannot just ignore you. The OAIC says they must write to you explaining their reasons, and the letter must tell you that you can use an external dispute resolution scheme or make a complaint.

For credit matters, Moneysmart points to AFCA, which offers free and independent dispute resolution, and links to the OAIC’s guidance on credit reporting complaints. Before going there, it helps to:

• Reread the refusal and note which facts they dispute.
• Gather any further evidence they may not have seen.
• Ask whether a manager or internal dispute team can review it.
• Keep a copy of every message.

Moneysmart also says a financial counsellor can help you get errors fixed at no cost, and the OAIC notes you can authorise a third party such as a financial counsellor or community lawyer with a written authority.

What cannot be removed?

It is only fair to be clear about this. Moneysmart says accurate information cannot be removed, even when it is negative. That includes:

• Repayment history from the last two years.
• Overdue payments of $150 or more that were 60 or more days late, kept for five years even after payment.
• Credit applications, kept for five years.

If the listing is correct but unfair in your eyes, a correction request will not fix it. Your options are to explain it to lenders, pay the debt so it shows as paid and build a clean record. Our guide on how long defaults stay on your credit file sets out the clock for each.

Should I pay a credit repair company?

Moneysmart is cautious. It says you can do the key task yourself for free, advises dealing only with companies licensed on ASIC’s professional registers, and warns that some charge high fees for free tasks, that unpaid fees could lead to a new default, and that paying them may not improve your score. If a company promises to wipe correct negative listings, treat it with scepticism.

If you do want help, a free financial counsellor is a better first call than a paid service.

What if the mistake is identity theft?

If your report shows accounts or enquiries you did not make, act quickly. The OAIC explains that you can ask the credit reporting bodies for a ban on your file. A ban lasts 21 days from your first request, can be extended without a set limit if the body believes you are or may be a fraud victim, and is free to request. During a ban the body cannot use or disclose your report without your written consent unless the law requires it. The trade-off is that applying for credit may be harder while it is in place, so tell your broker if you have one active.

Also contact the lender whose account is involved and ask them to investigate. The OAIC notes that third parties can act for you if you are a victim of fraud or identity theft.

Who benefits from this guide?

• Anyone who has spotted a listing that looks wrong.
• Borrowers about to refinance who want a clean file first.
• People who were declined and suspect an error behind it.
• Business owners whose personal file will be read for a business loan.
• Anyone worried about identity theft.

Does fixing an error improve my chances of a loan?

Often, yes, though it depends on the lender and the rest of your application. Removing a false default or a wrong overdue marker takes away something a lender might have used as a reason to decline. It can also lift a score, since your listings feed into it. It does not replace income, deposit or equity, but it removes a roadblock. Our guide on why your credit score may have dropped helps you see what else is affecting it.

In an illustrative example, a borrower finds a default for an account she closed years ago. She sends the closing statement to the lender, who agrees the listing was incorrect, and the correction follows. Her next application to refinance a home loan is assessed on her real history. Nothing is guaranteed, but she has removed an unfair obstacle.

How does Ownright help with credit problems?

We cannot correct your file for you, but we can read it with you and tell you what lenders will see. Trevor Scott and the team at Ownright Custom Finance in Knoxfield, Victoria, work with borrowers across Australia whose files are untidy, and we know which lenders will look past a blemish and which will not. If time is tight, there may be a route such as private loans with bad credit or a personal loan while corrections work through.

Mistakes to avoid

• Disputing verbally and keeping no record.
• Paying a repair company for something that is free.
• Asking to remove accurate listings, which wastes time.
• Applying for credit before a correction has taken effect.
• Forgetting to check all the credit reporting bodies, since they can hold different information.

What should I put in a dispute letter or message?

Short and factual works best. A clear dispute usually includes:

• Your full name, date of birth and current address, so the file can be matched.
• The name of the lender or listing you are disputing and the account number if you have it.
• What the report says and what you say is true, in one or two sentences each.
• The evidence you are attaching, such as a statement, a settlement letter or a payment receipt.
• What you want done, for example “please remove this default” or “please update the balance to nil”.
• A request for a written response and the correction notice the OAIC says must follow an agreed correction.

Avoid long emotional explanations. A clean, dated paper trail is more persuasive than a long story, and it helps if a complaint is needed later.

What if more than one credit reporting body holds the error?

The OAIC says that if the body you approach cannot help, it must consult other providers or bodies to complete your request. In practice, it is still wise to check each report after the correction, because bodies sometimes update on slightly different timelines. Order a fresh copy from each, using the free copy that the OAIC says you are entitled to after a correction. If one still shows the old information, go back to it with your correction notice.

How long should I leave before applying for a loan?

If the error is the main obstacle, it can make sense to wait until the corrected report is in hand. A lender who pulls a file mid-correction may see the old listing. If you cannot wait, tell your broker, who can explain the situation to the lender and attach the correction paperwork. Our guide on how to improve your credit before applying sets out a sensible timeline for people who have a little room.

When time is tight, such as a settlement date, there may be lenders who look at the application on its merits with the evidence you provide, including private first mortgages where the security matters more than the score.

Sounds like you are ready to apply once your file is sorted?

Sounds like you’re looking for a loan that your corrected credit file can support. We’re the lending experts in bad credit and file-repair lending, so click the button below and see if you qualify, whether your report is spotless or still mid-clean-up.