Credit Reporting…What the new rules mean for you

July 1^st 2018 will see the arrival of Comprehensive (or Positive) Credit Reporting. Not sure what this is or if it impacts you? Read on…

Changes are coming to Australia’s credit reporting system that will affect your credit file. Previously, your credit file has only shown negative credit information such as payment defaults, court judgements and bankruptcies. But thanks to some changes to the Privacy Act, your credit file will now include a lot more information about your credit history.

Banks and other organisations specifically permitted by law will be able to access a whole lot more information on how you manage your money. So every time you go for a loan, banks and lenders will be able to access:

• your repayment history for credit accounts such as home loans,
  personal loans and credit cards
• whether you made the minimum payment required
• whether the payment was made on time
• the type of credit account you hold
• the lender who provided the credit
• the current limit on your credit account
• when the account was opened or closed

This increased access to information will give credit providers a clearer picture about how you handle your finances and your ability to repay debt. This in turn will allow them to make better informed lending decisions. It also has benefits for you as lenders will be able to better match the credit you’ve applied for to your needs and circumstances. The downside is that if you’ve had trouble with making payments in the past you may find it harder to get your loan application approved.

The good news is that as a consumer you ultimately have more control over the information in your credit report, for instance:

• Credit providers and credit reporting bodies are obliged to take positive steps to help you get incorrect information in your credit report fixed. If your correction request is not resolved, you can access internal and external dispute resolution processes.

• Credit providers and credit reporting bodies must respond to complaints within set time periods, and if a complaint remains unresolved or the response is unsatisfactory, you can speak to an external dispute resolution scheme or be referred to the Office of the Australian Information Commissioner – an independent government agency.

• Credit providers risk very significant fines if they misuse the information in your credit report

• Credit providers cannot use information in credit reports that they get about you to market their products and services

• You have more options to help protect your personal and credit information if you have been, or may have been, the victim of identity theft or fraud.

It’s now more important than ever to take charge of your finances and here are some tips that can help you manage your money under the new credit reporting regime:

• Don’t apply for unnecessary credit – the more applications for credit you make can impact your credit score

• Use direct debits for every credit account you hold. Preferably from the same account where your income is deposited, just to ensure that there are funds available

• If you have a credit account you no longer need, consider closing it

• If you change addresses, make sure you notify all credit providers promptly

If you would like to discuss how the changes to credit reporting may impact you and your ability to get a loan give me a call on 90201420 or 0425726419.