Today Tonight - Credit Rating

Reporter: Jonathan Creek

We live in a money driven society that is geared largely to credit, but as we've found out, if you fail to pay a bill, miss a parking fine or don't settle on a late fee, you can be very easily blacklisted. It doesn't even have to be your fault --accounting errors by utility and phone companies can also cost you your credit rating and leave you out on the street.

Brisbane mother of two, Tania Roberts and her husband Matthew are haunted by an unpaid Energy bill. In 2004 the couple moved house and asked TruEnergy to transfer their account to their new property. They even continued as customers of TruEnergy at the new address for another year. "We continued to live and have an account with them and we assumed we were paying all our bills up to date. We never heard anything more about this outstanding bill that they claimed that we had", Tania said.

When the couple moved to Queensland there was no mention of any outstanding amounts when they finalised their account. "It wasn't until five years later it comes up on my credit file", Tanis said.

The black mark on Tania's credit rating was for $275, but the impact on her life was more taxing. The bad credit rating was stopping the couple from buying a home, based on the blemished record and the banks simply didn't trust them.

Paola Luz from Melbourne is another fighting to clear her name. A computer error by electricity provider AGL has her owing $50 -- she doesn't -- and can prove it. "I paid the final amount, it was definitely in the system -- they even said so themselves. They wrote it in their system and everything was fine, so it was just the backlog of paperwork that was coming to me", Paola said.

"Then I received a debt collector notice and there were I think two different amounts that they had -- I think it was dollar difference so even that made no sense -- I received one for $53 and there was another notice for something else. I asked them to chase it up with AGL because it wasn't my fault", she added.

Paola has been fighting for two years to have her clean record re-instated -- and remember she did nothing wrong.

"It is extremely easy for any company to put a mark against your credit file. All they have to do is lodge a piece of paper and then to get it off, you spend weeks and months running around trying to remove this default that you didn't know existed -- its impossible to remove", Tania said.

"Effectively we are talking about one to one and half million Australians who will have a black mark on their credit report" said Damian Karmelich from credit reporting agency, Dun and Bradstreet.

"Bad credit can arise from any credit line you might be involved with ranging from something like a mobile phone all the way through to a mortgage and everything in between -- credit cards, personal loans, car loans -- really any type of credit facility these days is applicable to reporting on a credit report", Damian added.

Damian explains 86% of Australians with credit arrangements have never checked their history, so most of us would have no idea if we have a black mark.

"If you get a copy of your credit report and you see that there is something on there that you don't think should be, then the first thing you need to do is raise it with the credit reporting agency that you got your credit report from" said Nicole Rich from the Consumer Action Law Centre.

Nicole claims it's not only important to know what is on your credit report but also your rights when it comes to clearing it up. "Unfortunately there can sometimes be smaller types of debts on the report that we don't think should always be on there. You can see really nasty things like very small debts maybe from a video store or even from a doctor's surgery, or something like that and some of those should not be on there -- you should be really challenging those", Nicole said.

"You need to take all of your bills seriously, even your smaller bills, because this does stay on your credit report for up to five years and it can impact the type of credit that you might get access to in the future -- or whether or not you can get access to any type of credit", Damian said.

Concerned by the growing number of black listings, Dun and Bradstreet have now set up a credit report website, where you can check your rating for free. "There are absolutely no draw backs at all to getting a copy of your credit report as often as you want to, it has no impact on your credit profile and it doesn't count against you. So there really is no reason why people shouldn't be getting access to their credit reports as often as they want", Damian said.

Tania and Matthew called in the lawyers, paying $1500 to have their record cleared and are now living happily in their dream home. "My message to other people is to really understand how the credit system works and make sure that when you are getting it for a loan or applying for a loan, that you do get your credit history and you do check", Matthew said.

For Paola though, it's an anxious wait to see if the latest assurances from AGL, that it's all been sorted out, show up on her credit report.

"If you do have a black mark on your credit report it doesn't have to be the end of the world. While it is going to stay there for five years, there are things you can do to get your finances in order. You can go to talk to independent financial counselors who will help you get organised", Damian said.

If you want to check your credit rating via Dun and Bradstreet, visit their website at: www.dnbcreditreport.com.au