Australians are among the most mobile populations in the world. More than 40% of us change address every five years, about twice the global average. We all live a pretty hectic life these days, and if there’s one thing that we certainly all wish we had more of, that is time.
With our busy lives, and moving being a fairly stressful event, sometimes we simply overlook or forget about changing the address for our bills.
What is a Serious Credit Infringement?
The term serious credit infringement relates to consumer overdue debts where an individual owes a debt to a credit provider but has left or appears to have left their last known address without paying that debt and without providing the credit provider with their new or forwarding address. A serious credit infringement can be listed on a credit report in this case if the individual has not had contact with the credit provider for six months or more despite attempts by the credit provider to contact them. It is also known as a clear-out?
Usually one of those terms and conditions is they will request your permission to access your credit report and perform their due diligence on what level of risk you are as a customer for them, and if they want to do business with you, by providing you with their goods or services now, with payment in a future date.
What is the difference between a Serious Credit Infringement and a default?
A default transitions to a serious credit infringement when you fail to pay your overdue debts and your credit provider suspects that you’ve left your last known address without providing your new contact details.
Serious infringements are listed on your credit report if the lender has attempted contact you several times and you haven’t paid your overdue amount or made contact within six months. Consumer serious credit infringements stay on your report for seven years.
If you pay it, it will revert to a default and remain on your report for five years. However, the evidence of your overdue account and repayment will remain in your credit history.
How does a Serious Credit Infringement affect my credit score?
Consumer serious credit infringements remain on a credit report for seven years from the date they’re listed. However, if they have been paid they revert back to a default and will remain on the report for five years. The fact that an amount has become overdue and then been paid becomes part of your credit history. In the case of commercial credit clearouts, if you can’t be contacted and it appears to the credit provider that you have left your last known address and you have not provided the credit provider with a forwarding address, they can immediately list the debt on your report as a clearout, even it hasn’t been overdue for 60 days or more. These commercial clearouts will remain on your credit report for seven years regardless of whether they are paid or not. Serious credit infringements can also lower your credit score and send negative signals to potential lenders in the future.
How long does a Serious Credit Infringement stay on my credit report?
Consumer serious credit infringements remain on a credit report for seven years from the date they’re listed. However, if they have been paid they revert back to a default and will remain on the report for five years. The fact that an amount has become overdue and then been paid becomes part of your credit history. In the case of commercial credit clearouts, if you can’t be contacted and it appears to the credit provider that you have left your last known address and you have not provided the credit provider with a forwarding address, they can immediately list the debt on your report as a clearout, even it hasn’t been overdue for 60 days or more. These commercial clearouts will remain on your credit report for seven years regardless of whether they are paid or not.
How can I remove a Serious Credit Infringement from my credit report?
You can’t remove a legitimate enquiry from your credit report. In most cases, you will have to wait until the five years have passed. After this, they are removed from your history. In general, the only details that can be removed from your credit report are those that are incorrect or erroneous. In these cases, you can submit a request to have the incorrect details removed from your file. To protect consumers, creditors must adhere to specific requirements when reporting serious credit infringements. Fix Bad Credit’s credit experts work closely with our legal team, who have vast experience and the understanding of these legislative requirements and compliance required for a default to be accurately listed. With over 8000 pages of legislation, over 200 compliance points that need to be checked, and over ten (10) years of experience in the industry, we are experts at identifying where mistakes have been made and assisting you to remove inaccurate defaults from your credit report.
How many points will my credit score increase by once the Serious Credit Infringement is removed?
This is a very common question, and unfortunately, there is no exact answer. Your credit score is based on the personal and financial information available in your credit report. Each credit reporting agency uses a slightly different algorithm to calculate your score and use varying credit score ranges. Each agency may also hold different information about you. As a result, your credit score may vary depending on which credit reporting agency has calculated it. Your credit report is based on information available from lenders (such as banks, credit unions and payday lenders), as well as any public record information (for example, any court judgements) available at the time. It may also include information from telecommunication and utility providers about any defaults or credit advances.
The algorithm used to calculate your credit score typically considers such details as:
- The credit or loan products you have held in the past, including the credit provider, the type of product, the opening and closing dates of the account and your credit limit details of the applications you’ve made for credit or a loan, including the number of applications, as well as the type and size of the credit or loan you requested.
- Your repayment history, other overdue accounts, and defaults.
- Information about any court judgements, bankruptcy or personal insolvency.
These factors are taken into account when calculating your credit score. For example, if you applied to multiple credit providers in a short space of time, this may signal that you are in credit stress and may negatively impact your credit score. According to reporting body Equifax, this flags you as a greater risk than someone who has.
See How My Credit Score is Calculated to get a better understanding.