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Privacy fact sheet 30: How the personal information in your credit report can be used

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May 2014

Credit reporting ‘know your rights’ series no. 5

This fact sheet is the fifth in a series that outlines what you need to know about how your personal information can be handled in the Australian consumer credit reporting system. It contains information about how the personal information included in your consumer credit report can be used. There are lots of technical terms used in the credit reporting system and we refer to some of those terms in this series. You can find more information about these terms in no. 2 (Privacy fact sheet 27) of this series.

Are there restrictions on how the information in your credit report can be used?

Yes, the credit reporting laws place restrictions on how the personal information in your consumer credit report can be used.

A CRB should generally only handle that information for the purpose of providing another entity with information about your consumer creditworthiness (which includes your eligibility to be provided with credit).

Credit scores

One example, is where a CRB uses personal information included in your consumer credit report to create a credit score. A credit score is a number that indicates the CRB’s assessment of your level of consumer creditworthiness, including your eligibility to be provided with credit.

Importantly, a CRB must not use personal information that is not permitted to be included in your consumer credit report to produce a credit score (or otherwise assess your consumer creditworthiness).

A credit provider may also create its own credit score about you, using information in your consumer credit report and other personal information it holds. However, a credit provider cannot give this score to a CRB.

For more information about how to access your consumer credit report and your credit score see no. 6 (Privacy fact sheet 31) in this series.

How can a credit provider use the personal information contained in your credit report?

A credit provider may use your consumer credit report:

  • to assess an application for consumer or commercial credit made by you to that credit provider (this includes an application to defer payment for goods or services).
  • to collect any overdue payments that relate to consumer or commercial credit provided by the credit provider to you (this includes overdue payments for goods or service provided to you on credit).
  • for the internal management of credit, but only where the use is for a purpose that is directly related to the provision or management of consumer or commercial credit by the provider. For example, this enables the credit provider to:
    • produce its own assessment of your consumer creditworthiness (importantly, a credit provider cannot provide this assessment to a CRB for inclusion in your consumer credit report)
    • manage its relationship with you, or
    • manage its business as a whole (for example, managing the business’ overall level of risk exposure).
  • to assess whether to accept you as a guarantor in relation to an application for credit made by another person to that credit provider (or credit provided to another person by the provider).
  • to assist you to avoid defaulting on your obligations in relation to a current credit account that you have with that credit provider.

How can other persons or organisations use the information contained in your credit report?

Mortgage or trade insurers

A mortgage or trade insurer can use your consumer credit report (or the personal information contained in that report):

  • to assess the risks associated with providing insurance to a credit provider where that credit provider has provided you with credit (or where you have applied to that provider for credit), or
  • for any purpose arising under a contract for mortgage insurance between the credit provider and the insurer.

Credit managers

A credit manager that receives a copy of your consumer credit report from a credit provider can use that report to:

  • process an application for credit that you have made to the credit provider, or
  • manage credit that you have been provided with by the credit provider.

Purchasers and their advisors

A person or organisation that is considering purchasing (or that has purchased) a debt or an ownership interest in a credit provider (or a legal or financial advisor engaged by the purchaser) is permitted to use your consumer credit report to decide whether to make the purchase, or to exercise its rights under the purchase arrangement.

Is your consent required before a credit provider can use the information in your credit report?

No, generally your consent will not be required.

However, you must expressly consent to the disclosure of your consumer credit report when it is sought in relation to an application for commercial credit.

How will you know if your credit report was a factor in a credit provider’s decision to refuse your application for credit?

If within 90 days of obtaining a copy of your consumer credit report, a credit provider refuses your application for credit the provider must notify you:

  • that your application has been refused
  • that the reason for that refusal was based wholly or partly on your consumer credit report (or the consumer credit report of a person offering to act as guarantor) and the name and contact details of the CRB that disclosed that report
  • that you can request a copy of your consumer credit report from a CRB for free in the 90 days following the notice of refusal, and how to make that request
  • how you can request to see any personal information that the credit provider holds about you, and
  • how you can seek to have information contained in your consumer credit report corrected, or how you can complain if you believe that the credit provider has mishandling your consumer credit report.

You should receive this notice at the time that your application for credit is refused, or within 10 business days of that date.

Can the personal information contained in your credit report be used to market goods or service directly to you?

CRBs and credit providers are not permitted to use the information contained in your consumer credit report for the purpose of marketing goods and services to you (for more information about the prohibition on direct marketing, please see no. 14 (Privacy fact sheet 39) in this series).

Are there restrictions on how a credit provider can handle other types of personal information not included in your credit report?

Credit providers may hold other personal information about your consumer and commercial credit activities, which is not permitted to be included in your consumer credit report. For example, they may have collected this information from you as part of an application for credit that you have made to the provider.

The credit reporting laws do not prevent credit providers from using this information to help make a decision about whether to give you credit. Rather, the credit reporting laws only determine what information can be included in your consumer credit report, and how that information can be used.

Importantly, any personal information that the credit provider has collected directly from you and not from your consumer credit report (including information that is not permitted to be included in your consumer credit report), must still be handled in accordance with the Australian Privacy Principles where that provider is also an APP entity (for more information, please see the APP Guidelines).

For further information

telephone: 1300 363 992
email: enquiries@oaic.gov.au
write: GPO Box 5218, Sydney NSW 2001
Or visit our website at www.oaic.gov.au