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Managing your finances or running a business in Australia often means you’ll come across the concept of a credit check. Whether you want to check your own credit score, perform credit reference checks on others, or ensure you’re complying with legal and regulatory requirements, understanding how to get a credit check and what it involves is crucial.
Credit checks not only impact your ability to borrow money, but also your reputation with lenders, suppliers, and sometimes even potential business partners. In this guide, we’ll break down how to get a credit check in Australia – from understanding the basics, to checking your own credit score online, and meeting compliance requirements as a business owner.
If you want to stay ahead in your financial planning or business operations, keep reading. We’ll explain everything in plain English so you can confidently take your next step.
What Is a Credit Check and Why Is It Important?
A credit check is an assessment of your credit history – essentially a snapshot of your financial reliability. It helps lenders, landlords, employers, and even business partners gauge how trustworthy you are when it comes to borrowing money or paying bills on time.
- Personal Credit Check: This refers to checking your own credit score and history (for example, before applying for a loan or a rental).
- Business Credit Check: Businesses can run credit checkers on suppliers, customers, or partners to reduce risk in commercial transactions.
In Australia, credit checks are commonly used for:
- Loan and credit card applications
- Mobile phone contracts or utilities
- Some employment/background checks
- Business credit applications or supplier contracts
Knowing your credit status can help you understand where you stand, spot errors that may be holding you back, and ensure you’re in the best possible shape before making big financial decisions.
How Do Credit Checks Work in Australia?
Credit checks in Australia are governed by national consumer and privacy laws, including the Australian Consumer Law and the Privacy Act. When you apply for credit or certain services, the provider (like a bank or phone company) typically asks for your consent to run a credit check.
They’ll use one (or sometimes several) of Australia’s licensed credit reporting bodies, such as Equifax, Experian, or illion. These agencies hold your credit file – an ongoing record of your credit activity (loans, payment history, defaults, and more).
Types of Credit Checks
- Soft Credit Check: A preliminary check that doesn’t affect your credit score (often used for pre-approvals or personal checks).
- Hard Credit Check: A formal credit application that records an enquiry on your file. Too many hard checks in a short period can impact your credit score.
How to Get a Personal Credit Check in Australia
Want to see where your credit stands before applying for finance or signing a new contract? You’re entitled to a free personal credit report every three months from each of the major credit reporting bodies. Getting your own report is called a “personal credit check” and it’s easier than ever to do it online.
Step 1: Choose a Credit Checker
These are all approved credit reporting bodies in Australia. Each may have slightly different information, so you can check with more than one if you wish.
Step 2: Gather the Required Documents
To check your credit online, you’ll usually need to provide:
- Full name and date of birth
- Proof of current and previous addresses
- Government-issued ID (e.g., driver’s licence, passport, Medicare card)
Step 3: Apply for Your Credit Report Online
Visit your chosen credit checker’s website and follow the prompts to apply for your free report. Most online portals allow you to upload documents and receive the report within a day or two, often instantly.
Step 4: Review Your Credit Report Carefully
Once you receive your report, check for accuracy – look for old debts, repayment histories, or even unfamiliar accounts. Errors aren’t uncommon. If something doesn’t look right, you can ask the credit provider or the agency to correct it.
Important to know: Checking your own credit is a soft enquiry, so it doesn’t affect your score or appear negatively for future lenders.
How Do I Check the Credit of Someone Else or a Business?
If you’re a business owner, supplier, or landlord, you may wish to conduct a credit reference check on another person or company before entering into a contract or providing services on credit terms.
Credit Checking as a Business
In Australia, businesses can use commercial credit reporting agencies to run checks on other businesses (and sometimes individuals) to assess financial risk. This is a common due diligence tool for minimising bad debts.
- Company Credit Reports: These give you insights into a company’s level of debt, default history, insolvency records, court actions, and payment habits.
- Credit Terms: Before offering payment terms (like 30 days to pay), it’s good practice to check your customer’s creditworthiness.
Step-by-Step: How to Credit Check Another Business
- Obtain the necessary consent if checking an individual (as you must comply with privacy laws).
- Engage a business credit checking service, such as Equifax, illion, or CreditorWatch.
- Search by business name, ABN, or ACN to generate a report.
- Review the credit file for red flags – court actions, late payments, or prior insolvency events.
If you routinely extend credit to customers, consider having clear Terms of Trade or credit application terms that state you may perform credit reference checks.
How to Credit Check Credit Providers or Licence Holders
Sometimes, you might want to ensure that a credit provider (such as a lender or broker) is properly licensed to operate in Australia. The Australian Securities and Investments Commission (ASIC) manages the National Credit Register, where you can perform a credit licence check or a credit licence search.
- Check ASIC’s Professional Registers: Search by name, ABN, or licence number to confirm the entity is a licensed credit provider under the National Consumer Credit Protection Act.
- Why It Matters: Using a properly licensed provider gives you legal protections and confidence that the company is complying with regulations.
For more on verifying business and licence details, you might also refer to Sprintlaw’s guide on ABN vs ACN and checking ASIC company details.
What Legal Obligations Do Businesses Have When Performing Credit Checks?
Credit checking isn’t just about protecting your business or personal interests – it’s also governed by strict legal obligations under privacy and consumer laws.
Key Laws and Considerations
- Privacy Act 1988: Sets out obligations for handling and storing personal information, especially around credit reporting. You must have a legitimate reason and, in most cases, the individual’s consent before conducting a credit check.
- Australian Consumer Law (ACL): Protects consumers from unfair business practices, including misuse of credit information.
- National Consumer Credit Protection Act: Governs who can provide credit and how credit licence checks must be performed.
If you’re running a business, especially one that deals with personal data or extends credit to customers, you’ll likely need a Privacy Policy and clear contract terms. If you’re unsure whether your processes comply, speaking with a data privacy lawyer is a wise first step.
What Legal Documents and Policies Should a Business Have for Credit Checking?
If your business performs any credit checking, especially on customers or suppliers, certain legal documents will help you meet your obligations and protect your company from risk.
- Credit Application Terms: Outlines payment and credit terms and states that you may conduct credit checks. (See Sprintlaw’s credit application agreements.)
- Privacy Policy: Explains how you collect, use, and store information, including credit details, to remain compliant with privacy law. (Learn more here.)
- Terms of Trade: Clearly set out your payment and supply terms, including how and when credit is extended to customers.
- Consent Forms: If you’re running credit checks on individuals, include an explicit consent form to meet legal requirements.
- Internal Data Handling Policy: Ensures your staff know how to handle sensitive credit information responsibly.
Not every business will need every document, but most will need at least a privacy policy and solid contract terms. For expert help reviewing or drafting these, you can explore Sprintlaw’s services on protecting sensitive information and contract law for businesses.
What If There’s a Mistake on My Credit File?
Mistakes do happen, such as old defaults, incorrect addresses, or even mistaken identity. If you notice an error:
- Contact the credit provider who reported the entry (e.g., your bank or phone company) and request a correction.
- If the provider agrees, they’ll inform the credit reporting agency to update your file.
- If you can’t resolve the issue, you can escalate to the Office of the Australian Information Commissioner (OAIC).
It’s important to act promptly, as inaccuracies can impact your ability to obtain finance or favourable business terms.
Can Anyone Run a Credit Check on Me?
No – only lenders, credit providers, landlords, and certain businesses can check your credit, and usually only with your consent. This protects your personal information under the Privacy Act. If someone has performed a credit check without your permission, you may have grounds for a privacy complaint.
For more on protecting your rights, check Sprintlaw’s guide on privacy complaints and data breaches.
How Do Credit Terms Work and Why Do They Matter?
Whenever you offer or accept credit – be it payment terms of 30 days, hire purchase arrangements, or instalment contracts – it’s essential you understand how credit terms work. Not only do they impact cash flow, but they also tie into your legal obligations under contract law and consumer law.
- Credit Terms: The agreed rules for payment and supply. These should be clear, written, and incorporated into any commercial contract to avoid misunderstandings or disputes.
- Set-Off Clauses: These let parties set off debts against each other – useful if you supply and buy from the same party. (See our set-off clauses article).
Key Takeaways
- Credit checks are a vital part of Australia’s financial and business landscape – for individuals and businesses alike.
- You can get a free personal credit check online from major credit checkers such as Equifax, Experian, or illion every three months.
- Businesses can and should perform credit checks on customers, suppliers, or other entities where there is significant financial exposure, always following privacy law.
- Always use clear legal documents – such as a Privacy Policy and credit application terms – when handling credit information or offering credit to customers.
- Check the validity of credit providers via credit licence search tools so you work only with properly licensed companies, ensuring legal compliance and peace of mind.
- If you find a mistake on your credit file, take steps quickly to have it corrected to protect your financial position.
- Seeking legal advice or guidance early, especially around privacy and credit law, can help you avoid pitfalls and make better-informed decisions for your business or finances.
If you would like a consultation on how to get a credit check, manage credit terms, or set up credit policies for your Australian business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
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