Credit reports list bad behaviour

Currently, credit reports list only negative information like serious defaults and bankruptcies. Under the new comprehensive reporting to be introduced next year credit agencies will be able to collect extra information, including repayment histories.

Defaults stay on your record for up to five years and bankruptcies for up to seven. Now, it's the outstanding limit on your credit card, not the balance, that counts.

“This can be particularly damaging when applying for a mortgage because having a $10,000 limit even with nothing owing can reduce the amount you can borrow by tens of thousands of dollars,” says Mortgage Choice broker John Manciameli.

Source: The Daily Telegraph