Does a Criminal Record Destroy a Credit Rating Forever?

They say that ‘crime doesn’t pay’ and that punishment is the ultimate consequence of crime. (Victorian English Proverb, 1860)

“There are crimes that, like frost on flowers, in one single night destroy character and reputation.” Henry Ward Beecher

Breaking the law, getting caught, charged, and convicted changes everything for the most part. You have crossed a line from which there is no going back. Even if you have served your penalty via a fine, or custodial sentence, your criminal record will follow you like a neon shadow casting a lurid light on your life and reputation. However, does a criminal record destroy a credit rating forever? The simple answer is no, but it can stain the sheets, the balance sheets, for some time. Your credit report does not contain your criminal record.

In fact, a criminal record unrelated to any serious credit infringement cannot be used to affect your credit score. Thus, criminal records are not included in the reports compiled by the national credit bureaus, but a lender may search for your criminal record elsewhere. In reality, it all comes down to how rigorous those checking out the potential borrower for a loan are in their endeavours to find out as much information as they can and how closely they actually play by the rules governing credit reporting.

“Well, when the President does it that means that it is not illegal.” Richard Nixon

What Is Not On Your Credit Report

“One of my friends once saw another guy’s (criminal) record and said, ‘Look, this guy is a born troublemaker, just a loser.’ I had to tell him, ‘No, that’s my record-and it doesn’t include my juvenile history.” Mike Tyson

The good news in Australia, unlike in more repressive regime-ruled nations, is that officially your criminal record does not show up on your consumer credit file. In addition, nor do your sexual preferences and practices. Plus, your political affiliations are likewise not included on your credit report. Nor are your religious beliefs and associations listed within your credit file. Race and ethnicity are not listed anywhere. Disabilities and medical history are, similarly, not mentioned within your consumer credit report. Income and bank balances are not listed. (Bristow, 2021) The credit reporting bureaus are not allowed to record these facts about you in your consumer credit file.

However, whether the more visually obvious facts or presumptions about you affect your ability to get credit is a moot point. The colour of your skin, the way you dress, and whatever badges of association you display all can unofficially impact upon judgements about your credit worthiness in the eyes of those making those decisions. Members of minority groups within Australia have reported to ombudsmen and independent bodies their experiences of being prejudicially denied credit on the basis of their skin colour, ethnicity, sexual preference, and gender. (Ross, 2019) The reality of the situation is that human beings make calls on these matters no matter the guidelines and legislation in place.

“Crime seems to change character when it crosses a bridge or a tunnel. In the city, crime is taken as emblematic of class and race. In the suburbs, though, it’s intimate and psychological – resistant to generalisation, a mystery of the individual soul.” Barbara Ehrenreich.

What Information Does Appear On Your Credit File

Your full name and address, plus any previous names and/or name variations that you may have used. Up to 2 previous addresses.

Your gender is included on your credit file.?

Current or last known employer will be included.

The year of your birth.

Your driver’s licence number.

The names of credit providers that have supplied you with consumer credit, and if they are licenced by ASIC. The type of credit provided by these lenders. The dates when this credit was extended to you and when it was terminated if it was. The credit limit applied to you. The terms and conditions upon that credit and limited information pertaining to your repayment and interest obligations. Your repayment history, which includes late and missed payments.

Financial hardship information that is reported in relation to your repayment history data.

Requested access to the information in your credit file by credit providers on the basis of applications for consumer or commercial credit. The type and amount of credit applied for.

Defaults on consumer credit of $150 and more, which mean that you are 60 days in arrears of a scheduled repayment. Statements pertaining to payments made on defaulted payments. Agreements made to variations in the terms and conditions in response to defaults or when you are provided with new consumer credit.

Court judgements made against you pertaining to credit provided, or applied for by you.

Recorded information about you recorded on the National Personal Insolvency Index which includes related bankruptcy and debt agreements.

Publicly available information related to your credit worthiness and activities in Australia. This information can only be sourced from generally available sources and from agency and/or state and territory authorities.

The opinion of a credit provider that the subject of the credit report has committed a serious credit infringement. (OAIC, 2022)

How Long Do Negative Listings Stay On Your Credit File?

Further good news is that bad stuff does not last forever on your credit report. Everything expires eventually and the consumer credit file sheds outdated information accordingly.

Clearout and serious credit infringements leave after 7 years from the date they go on the credit report.

Default listings are expunged after 5 years from when they were included in your file.

Bankruptcy lasts 5 years from the date of your declared bankruptcy or 2 years from the date the bankruptcy ends, whichever is longer.

Court Judgements leave the credit report 5 years from the date of the judgement.

Part IX Debt Agreements after 5 years from the date entered into or 2 years from the termination date or voided declaration, or completion of the agreement, whichever is longer.

Current loans listings last 2 years from when the loan ends.

Repayment history data remains for 2 years from the date the monthly payment was due and payable.

Financial hardship information 12 months after the date the monthly payment was made under the financial hardship arrangement. (YCR, 2022)

Get A Copy Of Your Credit File

The most proactive and sensible thing you can do is to get a copy of your own credit report.

Check it yourself for inaccuracies and mistakes because as someone famous once said:

“To err is human. To cover up is unforgiveable. To fail to learn is inexcusable.” Dario Echeverri

When it comes to our finances and the credit rating system, we must take the bull by the horns if we are to avoid being gouged by the beasts in the financial arena. Remember that knowledge is power, even if that knowledge comes with nasty truths about ourselves. Once you have confronted your true nature in the mirror, when it comes to money, you can set about rectifying the behaviours that may have landed you in the merde in the first place. The worst possible thing you can do in life is to hide from unpalatable facts about yourself.

Nothing changes if you don’t face the man or woman in the mirror. You may, also, find a few mistakes on your consumer credit report, which can be rectified. Go over your file with a fine tooth comb and the assistance of someone with the necessary expertise in credit law.

The lie of the land is always clearer to those who know the law and the true path forward.

Does a criminal record destroy a credit rating forever? No, it does not when it comes to the letter of the law in this instance.

“Stripped of ethical rationalisations and philosophical pretensions, a crime is anything that a group in power chooses to prohibit.” Freda Adler

Credit Repair Facts

Credit repair is possible when there are genuine incorrect and or misleading negative listings on a consumer credit report. Remember that credit reporting in Australia is governed by legislation under The Privacy Act 1988 (Cth). An experienced credit lawyer can offer valuable assistance under a No Win No Fee basis, which makes this a smart and cost effective proposition. It is, also, pertinent to remember that the majority of ‘so-called’ credit repair companies are not qualified as legal experts in this field. Do you recall that analogy I used about financial beasts in the arena gouging you for money? Well, it is particularly relevant in this context.

You can call or write to the credit provider if you discover disputed facts regarding the listing on your consumer credit file. The credit provider must respond to your communication within 30 days of receiving it. Failure for this to happen means that you can raise the dispute via an external dispute resolution (EDR). If your dispute involved loans, credit cards, or rental contracts for goods it would be the Australian Financial Complaints Authority (AFCA). An alternative option could be to direct your EDR to the Australian Information Commissioner. If your dispute related to telecommunications your EDR could be made to the Telecommunications Ombudsman. The Energy & Water Ombudsman NSW might be another place where you could raise the appropriate EDR.

“Every society gets the kind of criminal it deserves. What is equally true is that every community gets the kind of law enforcement it insists on.” Robert Kennedy

Examples Of Possible Disputed Credit Report Listings

The listed debt is not owed because of an identity fraud. You should contact the police in this instance and report the crime. Include a copy of the police report in your communication with the relevant credit provider.

Incorrect overdue repayment listing, as you were never 60 days in default on your payment on the loan. Provide evidence for this via account statements.

Incorrect amounts listed in the debts you owe.

Repetition in listing the same overdue account default.

Clearout listing when you were contactable and you are in contact with the credit provider.

Hardship arrangements not reflected in the listings on your credit file, as per the agreed terms and conditions.

“It is a capital mistake to theorise before one has data.” Arthur Conan Doyle

Check Your Credit Score Regularly

Every 3 months you can request a FREE copy of your credit report. Indeed, as there are 3 credit reporting agencies, you can get a copy from each, as there may be differences between them.

Experian Ph. 1300 783 684

Illion Ph. 1300 734 806

Equifax Ph. 138 332

Every time you are refused credit following an unsuccessful application you can request a free copy of your consumer credit file. However, it is smarter to check your credit report prior to applying for a loan or some other form of credit. Remember that knowledge is power. Forewarned is forearmed.

“Kid gets caught with marijuana, that kid has a police record. A Wall Street executive destroys the economy, $5 billion settlement with the government, no criminal record. That is what power is about. That is what corruption is about. And that is what has to change in the United States of America.” Bernie Sanders

In NSW, criminal offences will more generally stay on your record for 10 years after the date of conviction. The majority of offences will then become ‘spent convictions’ and will no longer show up on your criminal record. Murder and other serious offences, where you received a custodial sentence of more than 6 months, will never become spent. (NCL, 2018)

“Society must show that blue-collar crime never pays. Insidious white-collar crime pays very well, and nothing is declared. It’s the same reason why Financial Education - probably the most important subject of all, is absent from the general school curriculum – to keep the have-nots ignorant and the establishment’s riches safe.” Stewart Stafford

Getting and having a criminal record is not a smart financial move. The system is not fair and it treats the ignorant brutally. We all have a duty to ourselves and our loved ones to be well informed about the financial system, our own finances, and the credit rating process. All of this stuff should be taught in schools, as more important than much of what is currently being lauded on the curriculum. Money makes the world go around, according to economists and bankers.

References

Bankstown Criminal Lawyers, The Effects of Having a Criminal Record in Australia, 2018, Viewed 23rd July 2022.

Mark Bristow, What doesn’t affect your credit score?, 2021, ratecity.com.au Viewed 21st July 2022.

Credit Scores and Credit Reports, moneysmart.gov.au Viewed 21st July 2022.

Crime Quotes, goodreads.com Viewed 22nd July 2022.

Office of the Australian Information Commissioner, oaic.gov.au Viewed 20th July 2022.

James Ross, New research shows prejudice still high in Australia … 2019, theconversation.com Viewed 24th July 2022.

Your credit report, financialrights.org.au 2022, Viewed 22nd July 2022.