Credit Report Bans: Everything You Need to Know
Placing a ban on your credit report can be an effective way to prevent fraudulent credit being taken out in your name. While a ban is in place, a credit reporting body cannot disclose any information from your credit report to a credit provider. As a result, no one can apply for things like credit cards and bank loans, in your name.
A ban is a powerful form of financial protection but it is not always suitable. So when should you consider placing a ban on your credit report and how do you do it? Read on to find out.
Should I place a ban on my credit report?
There’s no need to place a ban on your credit report unless you’re worried that you’re a victim of identity fraud. This can happen through a data breach but also through everyday mishaps like losing your wallet, phone or passport – there’s no telling whose hands your most personal information will end up in.
If you think your identity has been stolen or is at risk of being stolen, a credit report ban can help protect you.
How does a credit report ban work?
A credit report ban is in place for a set period of time, usually 21 days. During this time Australia’s credit reporting bodies (Experian, Equifax and Illion) cannot share the details of your credit report when requested.
If a credit provider requests information from your credit report while the ban is in place, the reporting body will let them know that you may have been a victim of fraud.
In the case your identity has been stolen, a ban effectively gives you a headstart in the situation – allowing any potential fraud to be investigated without the risk of incurring damage to your credit score at the hands of fraudsters.
Are there any exceptions?
During a ban, information from your credit report can only be released with your express written permission or if it is mandated by Australian law.
Is there any reason I shouldn't place a credit report ban?
If you have no reason to suspect your personal information has fallen into the wrong hands, then there is no need to place a ban on your credit report. Doing so will simply put an admin barrier between you and any financial goals you may have, like securing a loan for your dream home.
Conversely, if you have reason to suspect your personal information is at risk but you are currently in the midst of a credit application (such as refinancing your home loan) placing a ban on your credit report could interfere with that process, preventing your credit provider from completing their checks and balances.
In this case, there are other measures you can take to stay protected.
How do I implement a ban?
The process can vary depending on the credit reporting body, but you’ll be required to provide some personal information including your driver’s license or passport. You only need to notify one credit reporting body. They will then notify all others on your behalf, with your permission.
There are two ways you can implement a ban:
1 – Manually through a credit reporting body
This involves contacting your chosen credit reporting body and manually requesting ban on your credit report. It can be a back and forth process, with layers of admin – not ideal when time could be of the essence.
2 – SavvyShield via the Credit Savvy app
You can learn more about the benefits of using SavvyShield over a manual ban here.
Will a credit report ban affect my credit score?
No. There’s no need to worry. Your credit score will not be impacted and you’ll be able to use your existing credit cards and repay existing loans as normal.
But remember: applying for credit while a ban is in place can cause headaches and a lot of extra paperwork!