What is a credit check?
A credit check helps lenders understand your financial history. Learn how it works, why it’s important, and what you need to know before applying for a loan.
A credit check is when a lender looks into your credit history to review your credit scores, to decide whether to approve your home loan.
When a credit check takes place
A credit check happens during the home loan application process – with the applicant's consent, of cause. The check is done in real-time through a credit bureau, which gives the lender a credit report on the home loan applicant.
What's a credit bureau?
A credit bureau collects any personal and financial information regarding the applicant’s credit history, on behalf of a lender.
What’s more, under the Comprehensive Credit Reporting laws, all Australian lenders are required to send updated information about their customers' repayment history to credit bureaus each month.
There are three main credit reporting agencies in Australia: Equifax, Illion and Experian.
What's in a credit report?
Along with personal information like your name, date of birth, address, and driver's licence number, credit reports include a detailed history of your financials, under specific categories.
Credit products
This will show details from the last two years, like:
- Types of credit products (such as credit card, store card, home loan, personal loan, business loan).
- Credit providers
- Credit limits
- Opening and closing dates of the accounts
- Joint applicant's name, if any
Repayment history
This will show whether you have met your repayment obligations on credit products you’ve held over the last 2 years.
Credit applications
This will show details on credit you may have previously applied for, like:
- Number of applications you’ve made
- Any loans you’ve guaranteed
Bankruptcy and debt agreements
This will show bankruptcies or debt agreements, court judgments, or personal insolvency agreements made in your name.
Defaults on utility bills, credit cards and loans
This will show any reports made by your service providers of non-repayments – called a 'default' – to a credit reporting body.
A default can be reported if:
- The amount owed is $150 or more
- Your service provider can't contact you – called a clear out
- 60 days or more have passed since the due date
- The service provider has asked you to pay the debt either by phone or in writing
A default stays on your credit report for five years, or seven years in the case of a clear out.
Please note, if you eventually pay the debt your credit report will still list the default but will also show you've paid.
Can you view your own credit report?
Yes. For free access to your credit report, you can go through providers like Credit Simple and Canstar.
Unloan is a division of Commonwealth Bank of Australia.
Applications are subject to credit approval, satisfactory security and you must have a minimum 20% equity in the property. Minimum loan amount $10,000, maximum loan amount $10,000,000, and total borrowings per customer across all Unloan loans is $10,000,000. (For purchase loans a minimum 10% equity is required - however a Lenders Mortgage Insurance (LMI) premium and higher interest rate apply. In some cases, depending on the property’s location or type, an LMI premium may also be required for LVR between 70.01% to 80%). For loans with Lenders Mortgage Insurance (LMI) the minimum loan amount is $10,000, maximum loan amount is $3,000,000 and total borrowings per customer across all Unloan loans is limited to $3,000,000).
Unloan offers a 0.01% per annum loyalty discount on the Unloan Live-In rate or Unloan Invest rate upon settlement. On each anniversary of your loan’s settlement date (or the day prior to the anniversary of your loan’s settlement date if your loan settled on 29th February and it is a leap year) the margin discount will increase by a further 0.01% per annum up to a maximum discount of 0.30% per annum. Unloan may withdraw this discount at any time. The discount is applied for each loan you have with Unloan.
*At Unloan, we do not charge any annual, application, banking, account, transaction, late or exit fees. In certain circumstances you may be required to pay a Lenders Mortgage Insurance (LMI) premium. Learn more about why this is applied and how it works. Government fees may also apply. Learn more about government fees here. Your current lender may charge an exit fee when refinancing.
Tax law is complex and subject to change. For the latest information, check the ATO website or with your accountant or financial advisor.
Unloan is a division of Commonwealth Bank of Australia is also not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and you should seek tax advice from a registered tax agent or a registered tax (financial) adviser if you intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.
Applications are subject to credit approval, satisfactory security and you must have a minimum 20% equity in the property. Minimum loan amount $10,000, maximum loan amount $10,000,000, and total borrowings per customer across all Unloan loans is $10,000,000. (For purchase loans a minimum 10% equity is required - however a Lenders Mortgage Insurance (LMI) premium and higher interest rate apply. In some cases, depending on the property’s location or type, an LMI premium may also be required for LVR between 70.01% to 80%). For loans with Lenders Mortgage Insurance (LMI) the minimum loan amount is $10,000, maximum loan amount is $3,000,000 and total borrowings per customer across all Unloan loans is limited to $3,000,000).
Unloan offers a 0.01% per annum loyalty discount on the Unloan Live-In rate or Unloan Invest rate upon settlement. On each anniversary of your loan’s settlement date (or the day prior to the anniversary of your loan’s settlement date if your loan settled on 29th February and it is a leap year) the margin discount will increase by a further 0.01% per annum up to a maximum discount of 0.30% per annum. Unloan may withdraw this discount at any time. The discount is applied for each loan you have with Unloan.
*At Unloan, we do not charge any annual, application, banking, account, transaction, late or exit fees. In certain circumstances you may be required to pay a Lenders Mortgage Insurance (LMI) premium. Learn more about why this is applied and how it works. Government fees may also apply. Learn more about government fees here. Your current lender may charge an exit fee when refinancing.
Applications are subject to credit approval, satisfactory security and minimum deposit requirements. Full terms and conditions are found on our Unloan Terms and Conditions. Modified Terms and Conditions will be set out in our Notice of Variation Agreement, if you are approved. This article is intended to provide general information only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice.
