How Long Do Enquiries Stay On Credit Report
What are credit enquiries and how do they impact your credit score?
A credit enquiry, also known as a credit check, is recorded whenever someone accesses your credit report. This could be a financial institution considering your loan application, a utility company checking your payment history, or even you reviewing your own credit information.
Credit enquiries fall into two main categories:
Hard enquiries (hard pulls): Occur when a lender or financial institution checks your credit report as part of their decision-making process for a loan, credit card, or other credit product you've applied for. These enquiries:
Require your explicit permission
Are visible to all lenders who access your credit report
Can affect your credit score
Stay on your report for 5 years
Common scenarios:
Credit card applications
Personal loan applications
Mortgage applications
Car loan applications
Rental property applications
Credit limit increase requests
Employment applications (in some cases)
Soft enquiries (soft pulls): These happen when you check your own credit report or when a company reviews your credit for pre-approval offers. These enquiries:
Are only visible to you on your credit report
Don't affect your credit score
Still stay on your file for 5 years, but don't impact lenders' decisions
How long do credit enquiries stay on file?
Credit enquiries (hard and soft): 5 years
Payment defaults: 5 years
Court judgments: 5 years
Writs and summons: 5 years
Debt agreements: 5 years*
Bankruptcy: 5 years**
Serious credit infringements: 7 years
Current credit accounts: 2 years after closure
Repayment history information: 2 years
Financial hardship information: 1 year
*Debt agreements will be removed 2 years after they have been terminated, declared void, or ended.
**Bankruptcies remain on your credit report for 5 years but will disappear 2 years after you are no longer bankrupt.
It's important to note that identity information like your name, date of birth, gender, driver's license, and address history is maintained for the entire life of your credit report.
When a credit enquiry or other listed item reaches its expiry date, credit reporting bodies like Equifax automatically remove it from your credit report, as required by the Privacy Act.
Can I remove enquiries from my credit report?
Generally, you cannot remove legitimate enquiries from your credit report before their natural expiry date (5 years). Credit reporting bodies maintain these records to provide lenders with an accurate picture of your credit-seeking behavior.
However, you can request the removal of incorrect or unauthorized enquiries. Here are situations where removal might be possible:
Enquiries made without your authorization
Fraudulent applications made in your name
Duplicate enquiries for the same credit application
Errors in how the enquiry was recorded
It's worth noting that even if you're denied credit after an application, the enquiry will still remain on your report for the full 5-year period.
How to remove incorrect enquiries from your credit report
If you discover unauthorized or inaccurate enquiries on your credit report, follow these steps to have them removed:
Check your credit report:
First, obtain a copy of your credit report to identify any potential issues. You're entitled to a free copy of your credit report once every 12 months from each of the major credit reporting bodies in Australia (Equifax, Experian, and Illion). Alternatively, services like Credit24 can provide you with regular access to your credit information.
Review your report carefully, focusing on the "Enquiries" section. Look for any applications or credit checks you don't recognize or didn't authorize.
Gather supporting evidence
If you find questionable enquiries, collect any documentation that supports your claim of inaccuracy. This might include:
Correspondence showing you didn't authorize the credit check
Evidence of identity theft if you suspect fraud
Documentation proving you never applied for the credit in question
Contact the credit provider
Reach out to the company that made the enquiry to discuss the situation. If they acknowledge an error was made, they should contact the credit reporting body to have the enquiry removed.
Keep records of all communications, including the names of representatives you speak with, dates, and details of the conversations.
Lodge a dispute with the credit reporting body
If dealing directly with the credit provider doesn't resolve the issue, you can file a formal dispute with the relevant credit reporting body. You can do this:
Online through their dispute resolution portal
By phone
In writing
When lodging a dispute, be sure to include:
Your personal details (name, date of birth, address)
Details of the enquiry you're disputing
Reasons why you believe the enquiry is incorrect
Any supporting evidence
What outcome you're seeking (removal of the enquiry)
Follow up on your request
The credit reporting body must investigate your claim and respond within 30 days. If your dispute is successful, the enquiry will be removed from your credit report. If unsuccessful, you have further options:
Request a statement to be added to your credit file explaining the disputed information
Complain to the Australian Financial Complaints Authority (AFCA)
Contact the Office of the Australian Information Commissioner (OAIC)
Do I have too many credit enquiries on my credit report?
According to FICO, having six or more enquiries on your credit report is generally considered excessive¹. Statistics show that people with six or more enquiries are eight times more likely to declare bankruptcy or face personal insolvency than those with fewer enquiries.
Here are some indicators that you might have too many enquiries:
Your credit score has dropped significantly after multiple applications
You're being declined fo$r credit despite having a good income and payment history
Lenders mention concerns about the number of recent applications
You've applied for multiple credit products within a 3-month period
Australian credit bureaus don't seem to specify an exact number of enquiries that's considered "excessive." Nonetheless, according to Experian Australia, “multiple hard inquiries from loan applications can hurt your credit scores. However, the impact could depend on which loans you apply for, when the creditors check your credit and the type of credit score."¹
And ASIC's MoneySmart website seems to confirm this: "Applying for a few
oans over a short period of time can look bad on your credit report."²
Here are some indicators that you might have too many enquiries:
Your credit score has dropped significantly after multiple applications
You're being declined for credit despite having a good income and payment history
Lenders mention concerns about the number of recent applications
You've applied for multiple credit products within a 3-month period
How to mitigate the impact of credit enquiries on credit score
Space out your credit applications
Avoid applying for multiple credit products within a short timeframe. Financial experts recommend waiting at least 90 days between credit card applications to minimize the negative impact on your score.
Do your research before applying
Thoroughly research credit products before applying to ensure you meet the eligibility criteria. Many lenders provide pre-qualification tools that can give you an idea of your approval chances without generating a hard enquiry.
Take advantage of rate shopping windows
If you're shopping for a specific type of loan, such as a mortgage or auto loan, try to submit all applications within a 14-45 day period. Credit scoring models typically count multiple enquiries of the same type within this window as a single enquiry, recognizing that you're rate shopping rather than trying to open multiple accounts.
Monitor your credit regularly
Regularly check your credit report to stay aware of all enquiries and identify any unauthorized activity. This proactive approach can help you address issues before they significantly impact your score.
Maintain good credit habits
Since enquiries are just one factor affecting your credit score, focus on maintaining positive credit behaviors in other areas:
Pay all bills on time
Keep credit card balances below 30% of your credit limits
Maintain a mix of credit types
Keep long-standing accounts open
Address any negative listings promptly
Apply only for credit you need
Be selective about credit applications and only apply when necessary. Each application generates a hard enquiry, so consider whether you truly need the new credit line before applying.
Consider a fraud alert if necessary
If you suspect unauthorized enquiries are due to identity theft, place a fraud alert on your credit file. This adds an extra verification step before new credit can be issued in your name.
Common misconceptions about credit enquiries in Australia
Myth 1: Checking your own credit score hurts your credit rating
Reality: When you check your own credit report, it's recorded as a soft enquiry and has no impact on your credit score. You can review your own credit information as often as you like without negative consequences.
Myth 2: All credit enquiries equally impact your score
Reality: Different types of enquiries affect your score differently. Multiple mortgage or auto loan applications within a short period are typically treated as a single enquiry, while multiple credit card applications are counted individually.
Myth 3: Credit enquiries stay on your report forever
Reality: In Australia, credit enquiries remain on your report for 5 years, not permanently. After this period, they're automatically removed.
Myth 4: You cannot pay to have enquiries removed
Reality: Legitimate credit enquiries cannot be removed before their expiry date, regardless of payment. Be wary of "credit repair" companies that promise to remove accurate enquiries for a fee.
Myth 5: Being declined for credit doesn't result in an enquiry
Reality: Whether your application is approved or declined, the act of applying generates a hard enquiry that stays on your report for 5 years.
Myth 6: Joint applications only create one enquiry
Reality: When you apply for credit with another person, an enquiry is recorded on both credit reports, affecting both scores.
Myth 7: Employers can see all your credit enquiries
Reality: While employers may perform credit checks in some situations, they receive a modified version of your credit report that doesn't include the same level of detail available to lenders.
What type of errors to look for on a credit report?
When reviewing your credit report, be vigilant for these common errors that could be negatively affecting your credit score:
1. Incorrect personal information: Check that your name, date of birth, address history, and employment information are accurate. Even minor discrepancies could create confusion or link someone else's credit activity to your report.
2. Duplicate accounts: Sometimes the same credit account appears multiple times on your report, making it appear that you have more debt than you actually do.
3. Incorrect account statuses: Accounts that have been closed might be listed as open, or accounts in good standing might be incorrectly marked as delinquent.
4. Outdated information: Items that should have aged off your report might still be listed. For example, a default that's more than 5 years old should no longer appear.
5. Unfamiliar accounts or enquiries: These could indicate either an error or potential identity theft. Pay special attention to credit applications or accounts you don't recognize.
6. Incorrect default listings: Defaults can only be listed for debts over $150 that are at least 60 days overdue. Additionally, the creditor must have sent you written notice before listing the default.
7. Wrong payment history: Your report might show late payments when you actually paid on time. This is particularly important to check as payment history significantly impacts your credit score.
8. Incorrect credit limits: If your credit limits are reported as lower than they actually are, it can make your credit utilization ratio appear higher, potentially lowering your score.
9. Discharged debts still showing as outstanding: Debts that have been settled through bankruptcy or debt agreements should be marked accordingly, not listed as still outstanding.
10. Mistaken identity: Sometimes information belonging to someone with a similar name or personal details can appear on your report by mistake.
Conclusion
Credit enquiries are a normal part of your financial journey, but understanding how they work and how long they stay on your credit report is crucial for maintaining a healthy credit profile. In Australia, most credit enquiries remain on your file for 5 years, though other credit information can stay for varying periods from 1 to 7 years.
While you can't remove legitimate enquiries before their expiry date, you can dispute inaccurate or unauthorized ones. By spacing out your applications, researching before applying, and maintaining good credit habits, you can minimize the negative impact of enquiries on your credit score.
Remember to regularly check your credit report for errors and address any issues promptly.
And if you're concerned about your credit history affecting your ability to obtain financing, Credit24 offers personal loans with a straightforward application process that doesn't require a perfect credit score. Its application follows the Australian practices of Responsible Lending, and you usually get a quick reply after your assessment is done.
