Credit may be refused to a consumer on the basis of an unfavourable credit bureau report supplied to a credit provider. Credit bureaus are private companies that compile information about consumers for the benefit of their members. Information is gathered from many sources, including banks, retailers, credit unions and real estate agents who are members of the particular bureau. A member of a credit bureau feeds information in and, by virtue of membership, may retrieve information out of any file a bureau has in its possession.

Part IIIA of the Privacy Act 1988 (Cth) regulates credit providers and credit reporting agencies. If a payment in relation to consumer credit is outstanding, a credit provider may record a payment default on the individual's consumer credit file.  A payment default is permitted if:

Section 18G(a) of the Privacy Act 1988 (Cth) states that a credit provider in possession or control of a credit file must take reasonable steps to ensure that the personal information contained in the credit file is accurate, up-to-date, complete and not misleading.

Credit reporting agencies have strict limits on the type of information they can list on a person’s credit information file and on how long they can keep credit information. There are also limits on who can access a consumer credit file and the purpose for which they can use a credit report.

For more information about privacy issues see information about the Commonwealth Privacy Act under consumer credit information.

Checking Credit History

A consumer may check the accuracy of credit information that has been used detrimentally. Where a trader, landlord or employer refuses to deal with a prospective consumer, tenant or employee on the basis of an unfavourable credit rating report, she or he must disclose to the consumer that such refusal was made on the basis of a credit report. The name and address of the credit bureau that provided the information must be given.

If this explanation is not volunteered, and the consumer suspects the refusal is based on a credit report, then she or he should apply to the bureau for the information. The credit bureau is required to provide a credit report for free. The bureau may only charge if the consumer wants the report within a certain amount of time. If the consumer is prepared to wait a reasonable amount of time, then the report must be free.

The consumer may ask the credit bureau to give her or him all the personal information in its files, the names and addresses of everyone to whom a report has been given in the past year, and a copy of each report. The consumer's request must be in writing. take reasonable steps to ensure that the information is given in a form relatively intelligible to the consumer and shall allow the consumer to make a copy of any information contained in the report.

It may be that the consumer feels that the information recorded by the credit bureau is inaccurate and unfair. If the accuracy of any of the information is queried, the consumer may request (again, in writing) that it be corrected. The agency must then within a reasonable time do its best to verify or supplement the information already on its files. The credit bureau is further required within a period of thirty days after the receipt of the objection to inform the consumer whether the agency has made any amendment or deletion to the information contained in the file.

If the information is corrected, the agency must then notify the change to all people to whom information was given within the previous 60 days. If the information is not corrected and a dispute arises, the consumer may ask a court to decide the matter. (It is best to approach the court through the Consumer and Business Services).

It must be understood, however, that no trader, landlord or employer is obliged to reverse a previous unfavourable decision after receiving notice of a correction.

The two main credit reporting agencies in Australia are Veda Advantage and Dun & Bradstreet.