What a Loan Processor Checks on a Credit Report

Quick answer: A loan processor reads a credit report for five things: the enquiry history, the repayment history on every open account, any defaults, any financial hardship flags, and whether the liabilities on the file match what the client declared. In Australia that means a report from Equifax or Experian, read with as much attention to the dates as the dollars. The report is evidence for the assessor, not a verdict on the client.

Have you ever opened a credit report and written the loan off in your head before you had actually read it?

I did, early on. There was a default sitting near the top of the page and I assumed the worst. Then I read the dates. It had been listed four years and ten months earlier, the client had disclosed it at the fact find, and it was two months off dropping away. The loan settled.

That is the habit I still teach: on a credit report, the dates carry as much weight as the dollars.

It matters more than it used to, because brokers now write most of the country's home loans. The MFAA reported that brokers settled 81.6% of new residential home loans in the June 2026 quarter (data by Cotality, released 3 September 2026). Behind a good share of those files is somebody like you, opening the credit report first.

Key Takeaways

Australia has two consumer credit reporting bodies, Equifax and Experian, after Experian completed its acquisition of illion in October 2024. Equifax scores run 0 to 1,200 and Experian 0 to 1,000.

Read the dates first. Defaults, enquiries and court judgments stay five years, repayment history two years, financial hardship information only twelve months.

A default is valid only if the payment was 60 or more days overdue, the amount was $150 or more, and two notices were issued in the right order.

A hardship flag is not a black mark. A credit reporting body cannot use it to calculate a credit score, and lenders surveyed by Arca mostly send those files to manual assessment.

Lenders detect liabilities the borrower did not disclose in 10% of applications, so reconcile the report against the application before the assessor does.

Which credit reporting bodies matter now?

Two: Equifax and Experian. If you learned this role a few years ago you probably learned "the big three", and that is out of date. Experian completed its acquisition of illion in October 2024, and both the Office of the Australian Information Commissioner (OAIC) and ASIC's MoneySmart now list only the two.

That matters at the desk, because the scales differ:

Equifax scores run 0 to 1,200.
Experian scores run 0 to 1,000.

A client quoting you "780" is telling you very little until you know whose 780 it is. On the Experian scale that is strong. On the Equifax scale it is mid-pack.

Expect more clients to arrive with an opinion, too. Arca research cited in Treasury's Review of Australia's Credit Reporting Framework found 39% of consumers had checked their report in the previous twelve months in 2023, up from 27% in 2019, while the share who had never checked fell from 57% to 37%.

How long does each type of information stay on the file?

This is the table I wish someone had taped to my desk in my first month. The second column is the one people forget: a period is useless until you know what starts it.

A caution while you are reading it. I checked these against the OAIC, MoneySmart and Equifax on 17 September 2026. They agree on the periods in the middle column. They are mostly silent on the third, which is why three cells say so rather than guessing.

They also do not agree on everything. Equifax now lists a clearout at five years where MoneySmart still says seven, and neither defines a clearout or a serious credit infringement on the pages I read. Both are rare enough to look up on the day you meet one, and I would rather leave them out of the table than hand you a number I cannot stand behind.

Information on the credit report	How long it stays	When the clock starts
Financial hardship information	1 year	An "A" runs one year from the final repayment under the arrangement. A "V" runs one year from the date the arrangement started
Repayment history information	2 years	Not stated on the pages I checked
Credit enquiry	5 years	Not stated on the pages I checked
Default	5 years	The date the default was listed, paid or unpaid. Not the date the client first fell behind
Court judgment, writ or summons	5 years	Not stated on the pages I checked
Consumer credit account information	Life of the account plus 2 years	Two years after the account is closed or ceases to exist

A word on the court judgment row, because it is the one people skip. A judgment, writ or summons sits there for five years and it is not something you resolve on the file. Flag it to the broker the moment you see it, before you go any further, because it changes which lenders are worth approaching and that is the broker's call to make, not yours. Your job is that nobody discovers it at assessment.

Two rows cause most of the trouble.

A default stays five years whether or not it is paid. Paying it updates the status, which a human assessor will weigh, but it does not shorten the listing. Clients find that genuinely upsetting, and it lands better coming from you early than from a decline letter later.

The five years runs from when the default was reported, not from when the client first fell behind. Treasury's review says so explicitly. Take the listing date off the report rather than calculating it from the client's memory.

What makes a default listing valid?

Quite a lot has to happen before a credit provider can list one, and the OAIC sets out every step. Being able to check these off makes you more useful than most people in the room.

The payment must be overdue by at least 60 days.
The amount must be $150 or more.
The provider must have sent two separate notices, the second at least 30 days after the first, flagging the intention to disclose the information to a credit reporting body.
The provider must then wait at least 14 days after that second notice before listing.
The provider cannot wait more than 3 months after that second notice to list it.

Related, and easy to confuse: for repayment history purposes a "missed payment" is one made more than 14 days after the due date. Fourteen days late is not a missed payment. Fifteen is.

You are not there to adjudicate whether a listing is lawful. But if the client insists no notice ever arrived, or the dates look wrong, raise it with the broker rather than shrugging past it. The OAIC's page on repayment history and defaults is written for consumers, which makes it an easy one to forward.

What does repayment history tell you that the score does not?

The shape of the last 24 months. A score compresses everything into one number; repayment history information (RHI, because of course it has an acronym) shows the month-by-month record on each account.

What I look for, in order:

Pattern, not incidents. One late payment eighteen months ago is noise. Six across four accounts in six months is a story, and the assessor will read it as one.
Recency. The most recent six months carry far more weight than the six before them.
Accounts that are not on the application. More on that shortly.

RHI exists on your reports because of comprehensive credit reporting (CCR), where repayment history and hardship status are shared reciprocally and access is restricted to holders of an Australian Credit Licence. Mandatory supply applies to large ADIs, meaning the four major banks: 50% of accounts by July 2021, full mandatory reporting from July 2022. For everyone else it is a voluntary commercial decision.

Treasury reports that providers supplying comprehensive data grew from 4 in 2017 to 85 in 2023, and accounts covered from 0.1 million to 23.1 million. By 2023 roughly 92% of home loans were covered.

The gap to hold in your head: buy now pay later and payday lenders are largely absent from CCR. A clean credit file proves nothing about BNPL. That is exactly why reading the bank statements properly is not optional, because the statements show the fortnightly debits the credit file never will.

How should you handle a financial hardship flag?

Carefully, and without panic. Financial hardship information has only appeared on Australian credit reports since 1 July 2022. Before that date, a hardship arrangement could not be listed at all.

Per the OAIC's guidance on financial hardship information:

It sits as a flag against the repayment history: A for a temporary arrangement, V for a permanent variation to the contract.
It does not disclose the reason. Illness, redundancy, a natural disaster, a separation: none of that appears.
A credit reporting body cannot use it to calculate a credit score.
It stays 12 months only, the shortest retention period on the file.

Treasury's review notes that fewer than 1% of credit files carry one, and that an Arca survey of 21 member lenders found they do not treat it as an automatic black mark. Most refer those files to manual assessment.

Manual assessment is the practical consequence to plan for. A human will read the file, so the file has to explain itself. When I see an A or a V, the file note goes in before anyone asks: what the arrangement was, when it ended, what the account has done since.

One note on tone. A client with a hardship flag usually went through something hard and then did the responsible thing by contacting their lender. You need the dates and the status, not the story.

Why do enquiries matter more than clients expect?

Because they sit there for five years, and a cluster of them in a short window reads as distress whatever the client intended.

An enquiry records the date, the provider and the type of credit each time a provider accesses the file. It does not record the outcome. A declined application and an approved one look identical.

So six enquiries in eight weeks is not evidence of anything on its own, and that is precisely the problem: the assessor may read it less charitably than you would. Ask the broker what the client was doing, write the answer down, and put it in the file rather than leaving the assessor to guess.

It is also worth clients knowing, before they shop around, that "just seeing what I can get" from four lenders leaves a mark that outlasts the shopping trip by five years.

What happens when the report and the application disagree?

You reconcile them, line by line, before the file goes anywhere.

Treasury reports that comprehensive credit reporting lets lenders detect liabilities the borrower did not disclose in 10% of applications. One in ten. That is rarely dishonesty. It is a forgotten store card, an old personal loan the client thought was closed, or a joint facility from a former relationship.

When the file is clean, CCR has made everything faster: Treasury reports time to approval fell from around five days to two, and NAB reported a 52% reduction in median time to unconditional approval.

My method is unglamorous and has never let me down:

List every liability on the credit report.
List every liability on the application.
Tick them against each other.
For anything on the report but not the application, ask the broker. Never quietly delete it.
For anything on the application but not the report, find the statement. Remember BNPL may be real and simply invisible.

Anything still unexplained goes in the file notes. This is the same principle behind the whole loan processor's file checklist, and it feeds directly into how lenders assess serviceability, because an undeclared liability changes the servicing calculation rather than just the tidiness of the file.

What if the credit report is wrong?

It gets corrected, and it costs the client nothing. Knowing this properly is one of the easiest ways to look like the professional you are.

One free report every 3 months from each credit reporting body.
An extra free copy if the client was refused credit in the past 90 days, or if information was corrected.
Corrections are free. Nobody should be paying a credit repair outfit for something the law provides at no cost.
A correction must be made within 30 days by statute, and the Privacy (Credit Reporting) Code 2025, which commenced 25 March 2025, requires non-complex corrections within 5 business days.
"No wrong door": the client can approach either the credit provider or the credit reporting body, and whoever receives the request has to deal with it.
If a correction is refused, the organisation must write to the client, explain why, and point to external dispute resolution.

Three pages worth forwarding: the OAIC on how to access your credit report and how to correct your credit report, and MoneySmart's gentler explainer on credit scores and credit reports. Equifax also publishes its own summary of how long information stays on a credit file, which helps when a client wants it from the bureau directly.

A caution on scope. Pointing a client to the OAIC's correction process is information. Telling them what to do about their credit position edges into advice, which belongs to the licensed broker. If that boundary feels blurry, it is covered in whether you need a licence and in the compliance basics for loan processors.

Where does the credit report sit in responsible lending?

It is verification evidence. ASIC's responsible lending guidance sets out three obligations under Chapter 3 of the National Consumer Credit Protection Act 2009. A credit licensee must:

Make reasonable inquiries about the consumer's financial situation, requirements and objectives.
Take reasonable steps to verify that financial situation.
Assess that the contract is "not unsuitable" for the consumer.

The credit report mostly serves the second one: it tests the stated position against an independent record. Keep that frame open as you read. You are not hunting for reasons to decline, you are assembling evidence that lets the assessor make a defensible decision, which is what a loan processor does all day. Reading a credit file well is a skill you can learn deliberately, and it is one of the things I work through in the Become a Loan Processor course.

Frequently asked questions

How many credit reporting bodies are there in Australia? Two for consumer credit: Equifax and Experian. Experian completed its acquisition of illion in October 2024, and both the OAIC and MoneySmart now list only the two. Their scales differ, Equifax running 0 to 1,200 and Experian 0 to 1,000, so a score quoted without a bureau attached is not comparable.

Does paying a default remove it from the credit report? No. It stays five years from the date it was listed, paid or unpaid. Paying it updates the status, which a human assessor will take into account, but does not shorten the period. Treasury also confirms the five years runs from when the default was reported, not from when the borrower first fell behind.

Will a financial hardship flag stop a home loan being approved? Not automatically. A credit reporting body cannot use hardship information to calculate a credit score, the flag does not disclose the reason, and it drops off after 12 months. An Arca survey of 21 member lenders cited by Treasury found lenders do not treat it as an automatic black mark, and most refer such files to manual assessment. Plan for a human to read the file, and write the note accordingly.

How often can a client get their credit report for free? Once every 3 months from each credit reporting body, plus an extra free copy if they were refused credit in the past 90 days or if information was corrected. Corrections are free, must be made within 30 days by statute, and non-complex corrections must be handled within 5 business days under the Privacy (Credit Reporting) Code 2025.

Do buy now pay later accounts show on a credit report? Often not. BNPL and payday lenders are largely absent from comprehensive credit reporting, so a file can look clean while the client services several commitments. Read the bank statements alongside the report rather than treating either one as the full picture.

One last thought

Read the dates, then the dollars, then decide what needs a file note. Almost nothing on a credit report is permanent. Most of it is a record of a particular twelve or twenty-four months in someone's life, and it will age off. Your job is to describe it accurately to the person assessing the loan, not to judge it.

What is the oddest thing you have found on a credit report that the client had genuinely forgotten? Mine was a $47 telco default from a share house in another state. It cost that file three weeks.

If you are working out how to get into this side of the industry, how to become a loan processor in Australia is the sensible next read.

Sources

Office of the Australian Information Commissioner, Repayment history and defaults - retrieved 17 September 2026, https://www.oaic.gov.au/privacy/your-privacy-rights/credit-reporting/repayment-history-and-defaults

Office of the Australian Information Commissioner, What is financial hardship information? - retrieved 17 September 2026, https://www.oaic.gov.au/privacy/your-privacy-rights/credit-reporting/hardship-assistance/what-is-financial-hardship-information

Office of the Australian Information Commissioner, Access your credit report - retrieved 17 September 2026, https://www.oaic.gov.au/privacy/your-privacy-rights/credit-reporting/access-your-credit-report

Office of the Australian Information Commissioner, Correct your credit report - retrieved 17 September 2026, https://www.oaic.gov.au/privacy/your-privacy-rights/credit-reporting/correct-your-credit-report

ASIC MoneySmart, Credit scores and credit reports - retrieved 17 September 2026, https://moneysmart.gov.au/managing-debt/credit-scores-and-credit-reports

Australian Securities and Investments Commission, Responsible lending - retrieved 17 September 2026, https://www.asic.gov.au/regulatory-resources/credit/responsible-lending/

Equifax Australia, How long does information stay on my credit file? - retrieved 17 September 2026, https://www.equifax.com.au/personal/how-long-does-information-stay-my-credit-file

The Treasury (Australian Government), Review of Australia's Credit Reporting Framework, Final Report, September 2024 - retrieved 17 September 2026, https://treasury.gov.au/sites/default/files/2025-08/review-of-australias-credit-reporting-framewor.pdf

Mortgage and Finance Association of Australia, Quarterly broker market share, June 2026 quarter, data by Cotality, released 3 September 2026 - retrieved 17 September 2026, https://www.mfaa.com.au/news/mortgage-broker-market-share-reaches-record-81-6

Written by Sharyn Burgess, founder of Become a Loan Processor and known in the industry as "the Mortgage Maven." Training only, we help you build job-ready skills; we don't guarantee employment. This article is general information, not credit advice.