Is there Such a Thing as a Permanent Black Mark on my Credit History?
There are two separate lists that carry a record of your credit history.
1. Credit Report
Most Financial institutions will use a credit reporting Agency to check on your credit history. The most common one in Australia being VEDA. You can obtain a free copy of your credit report by going to mycreditfile.com.au and clicking on the free credit report section. Anything that goes on this credit file will stay there for 5 years and one day in most instances.
That doesn't mean a default necessarily goes away after 5 years. If you haven't addressed that debt or default, your creditor will most likely keep putting a new default on your file every couple of years and keep pursuing you for the debt.
Unless you pay or address the debt with a Debt Agreement, Personal Insolvency or Bankruptcy, you can stay in a Bad Credit situation for the rest of your life.
2. There is also a Government list called the NPII. (National Personal Insolvency Index)
This keeps a record of any Legal Judgements, Bankruptcies, Personal Insolvency and Debt Agreement information, Dates and Discharges and also Defaults and notices of suspensions that occur if you don't keep to the terms of any of these arrangements. This is a public record that can be accessed by anyone for a fee.
Only A Debt Agreement will drop off this list after 5 years from approval or at the end of the last payment (if the payment plan goes longer than 5 years)
Only a Personal Insolvency Practitioner will have access to this by you filling out a form giving permission for this to be checked.
Example: You apply to do a Debt Agreement again and it needs to be checked that you have been discharged for 10 years.
This change was made in November 2015.
All other entries such as a Bankruptcy will stay as a permanent public record on the NPII and anyone can pay a fee to access this Index.
It should be noted that most Creditors will not check the NPII when you apply for a loan but will be relying on the Credit report that they obtain.
So is there such a thing as a Permanent Black mark on your Credit History?
If you pay a Debt or enter into a Debt Agreement, Personal Insolvency or Bankruptcy, no further defaults can be put on your credit file from those existing debts listed. So if you generate no new bad debts and keep to your payment plans, your credit History will be clean after 5 years.
Do nothing though and your Credit rating will stay Bad.