Quick answer
Assessors read the credit file for four things: defaults, arrears, enquiries and how existing credit has been handled. For a business loan they may look at the owners' personal files as well as the business's. You are entitled to a free copy of your own report once every three months, so check it before you lodge, correct errors and prepare a short note on anything real.
Key points
- Four things matter: defaults, arrears, enquiries and conduct.
- Owners' personal files can matter even when a company borrows.
- A free copy is available every three months; check yours first.
- Errors must be corrected by the provider, usually within 30 days.
- Free copy
- Once every 3 months
- Error correction
- Within 30 days, or a longer period you agree to
- At the first enquiry
- No credit check
Whose credit file gets read?
It depends on who is borrowing and who is standing behind the loan. A sole trader is one person, so it is the owner’s personal file. A company has its own commercial credit profile, but its directors, especially if they guarantee, often have personal files read as well. A trust’s trustee is read, and where a trustee is a company, its directors may be too.
The reason is straightforward. In a small business, how the owners handle personal credit is a decent predictor of how the business will handle business credit. That is a general observation, not a rule for any particular lender, but it explains why you should think about the owners’ files as well as the company’s.
What does the assessor actually see?
Four categories matter most.
| What it is | How it reads | What helps |
|---|---|---|
| Defaults | Debts that were not paid and were listed | Date, size, paid or unpaid, and a short story |
| Arrears | Late repayments on current credit | A recent run of on-time payments |
| Enquiries | Times you applied for credit | A sensible spread, not a burst of applications |
| Conduct | Repayment history on existing credit | Consistent, ordinary behaviour |
A file with nothing unusual reads as quiet and low-risk. A file with a recent default or burst of enquiries reads as something to ask about. In neither case is the file the whole story; it colours how the rest of the evidence is read.
How do I see my own file first?
The OAIC explains that a credit reporting body must give you a free copy of your credit report once every 3 months. Request yours from each of the main credit reporting bodies, since their records are not always identical, and read the whole thing, not just the score. Check names, addresses, listed accounts and dates. Look for accounts you do not recognise.
Doing this before you lodge puts you in control. You find out what the assessor will see, and you can fix errors or prepare an explanation before anyone asks.
What if there is a mistake?
The OAIC says you can contact the relevant credit provider first, since that is usually the quickest route, or any credit reporting body, and that correction is free. If the information is found to be incorrect, it must be corrected within 30 days or a longer period you agree to, and you can then request a new copy to confirm the change.
Start early. Thirty days is generous in law but long if your plans have a date attached.
Illustrative example. A café owner finds a default on a mobile phone account in her old business name that was settled two years earlier but still shows as unpaid. She contacts the provider, who corrects the entry. Because she did it before lodging, her pack arrives with a clean file and a note with the old account’s closure letter attached.
What if the listing is genuine?
Then the aim is context, not concealment. Honest, short and factual works best: when it arose, what caused it, what has been done since, and what the last twelve months look like. The page on explaining a credit listing offers a structure, and the principle runs through all of it: assessors are far more comfortable with a problem you name than with one they discover.
Does enquiring here involve a credit check?
No. The enquiry on this site is free, takes about a minute and involves no credit check at the first stage. If a credit check becomes part of the process, it comes later and only once you have decided to go ahead. That separation lets you ask what is possible without adding a mark to your own file.
What about the speed of getting the report?
Request it as soon as you start preparing. Reports are not always instant, and you want time to read, query and correct before the pack goes in. The application readiness check includes a credit-file question, so you can see how it sits in your overall picture.
How should I read a credit report?
Start at the top and read every line, not just the summary. Check the personal details first; wrong addresses or a different spelling of your name are early signs of mixed-up records. Then read the account list: every credit product, its opening date, its limit and its repayment history. Then read the enquiries section: who looked, when and for what.
Make a list of three things. First, anything you do not recognise. Second, anything you do recognise but that looks wrong, such as a closed account shown as open. Third, anything accurate that you would struggle to explain in a sentence. The first two are for correction; the third is for the short note. Doing this once, with a pen, takes about half an hour and turns an unknown into a known.
What about a company’s own credit profile?
Companies have commercial credit files too, kept by commercial credit bodies, and these can show payment behaviour with suppliers as well as lenders. If your company has been late to pay suppliers, it may appear. As with personal files, the answer is to know what is on it and to keep a line ready. Suppliers are often willing to confirm a settled account in writing, which is useful evidence.
Ready to lodge?
With your credit file understood, lodge a free enquiry. It takes about a minute, involves no credit check at this stage, and goes to a real person, not a crowd of lenders.
When you fill in the form, be straightforward about any credit issues. Bad credit is considered case by case, and accurate answers mean the first conversation can focus on what the file can do and what the next step is, rather than on surprises.
Frequently asked questions
Will enquiring with you affect my credit file?
No. Sending the enquiry on this site involves no credit check. If a credit check ever becomes necessary it comes later, and only with your agreement.
Do company loans look at personal credit files?
They can, particularly where directors give guarantees or the business is young. Be ready for owners' files to be part of the picture.
How do I get my own report?
The OAIC explains that a credit reporting body must give you a free copy once every 3 months. Ask each major credit reporting body for yours, and check the details, not just the headline.
What if I find a mistake?
Contact the credit provider or any credit reporting body. According to the OAIC, if the information is found to be incorrect, it must be corrected within 30 days unless you agree to a longer period, and you can then get a fresh copy to confirm the change.
Does a default end my chances?
Not automatically. Bad credit is considered case by case. Age, size, whether it is paid and the story behind it all matter, which is why a short, factual note helps.