Credit Reference Agency

A credit reference agency, also known as a credit reporting body, is an organisation that collects and maintains financial data on individuals and businesses. These agencies provide credit reports to lenders, helping them assess a borrower’s creditworthiness when applying for a type of credit.

What does a credit reference agency do?

A credit reference agency gathers information from banks, financial institutions and public records to create a credit report. This report includes details about credit accounts, repayment history, defaults and may include outstanding debts over 90 days. Lenders use this information to conduct credit checks before approving loans, mortgages, or other financial agreements.

Types of credit references

There are different types of credit references that a credit reference agency may include in a report, such as:

• Trade references: Information from suppliers or business partners regarding a company's payment history.
• Bank references: Details from financial institutions on how an individual or business manages their accounts.
• Loan and credit card history: Records of previous and existing loans, credit cards and repayment behaviour.
• Letters of credit: Documents issued by banks to guarantee a buyer’s ability to pay a seller.

Why are credit reference agencies important?

Credit reference agencies play a crucial role in financial decision-making. Their reports help lenders evaluate risk, determine interest rates, and decide whether to approve an application for a type of credit. Individuals and businesses can also access their credit reports to monitor their financial health and improve their credit standing.

How to check your credit report

In Australia, individuals have the right to request a free credit report from a credit reference agency once every 12 months. Reviewing your credit report regularly helps identify errors, prevent fraud, and improve your financial standing. Understanding the role of credit reference agencies and keeping track of your credit history can improve your chances of securing favourable loan terms and financial opportunities.