Most people find laws that relate to privacy and credit boring and irrelevant, however changes to the privacy laws from March 2014 will change the way credit providers will assess applications for credit.
This will apply from everything from credit card applications to home loans and therefore has the ability to affect every Australian.
Your “credit rating” is a file that records applications for finance, any defaults and some agencies also give you a score or rating as to your credit worthiness. This information is then used by banks and other credit providers in assessing whether to lend you money.
These changes will increase the amount of information licensed credit providers are able to share with each other via your credit report and you should be aware as to how the new regime will operate.
In the future, your credit report will show your monthly repayment history (reliability) on your consumer credit – including information as to whether you make your loan and credit card repayments on time, and if not, how late you are in making payment. If you make a part payment, the information available will also show that amount.
The new laws allow financial institutions to go back two years and this will be the amount of information available to credit providers in the future. A history of poor repayments may mean that you already have these matters recorded against your name.
The effect that the new laws will have on you depends entirely upon the manner in which you have managed your credit obligations in the past. A strong and reliable repayment history should have a positive influence on a new credit application, however those with a habit of late or irregular payments may be penalised.
As well as including repayment history information, the changes to credit reporting will also include the following information:
- The dates on which credit accounts were opened and closed
- The type of credit account opened
- The current limit of each open credit account.
At this stage, the changes apply only to licensed credit providers and NOT Telecommunications or utility providers. If you feel that you have been unfairly treated, or that there are some errors on your credit history, you should first speak with the credit provider, however if you are unable to resolve the matter, one of our experienced lawyers may be able to assist you.
For more information, call our office for an appointment.