Your credit file

Each business with which you have an account has records about you including banks, insurers, power and telephone companies, and retailers.

But they’re not the only ones. Two credit-reporting companies in New Zealand – Veda Advantage (formerly Baycorp Advantage), and Dun and Bradstreet – collect and on-sell information about you.

These companies focus on your credit history. They get information from credit issuers (such as banks and finance companies), court records, and publicly accessible databases.

These credit-reporting companies can’t sell this information to just anyone, because access to the information is governed by the Privacy Act and by regulations overseen by the Privacy Commissioner. But they can sell it to companies which meet the definition of "credit provider" or which have your permission to look at your credit record. This includes lenders, retailers which offer you credit and prospective insurers, landlords and employers.

What's filed about you

The file that a credit-reporting company has compiled about you is known as your “credit file”. It may include the records that show (amongst other things):

• your name and any other names you use, date of birth, gender, marital status, present and past addresseses, employer and occupation
• who has made credit enquiries about you and when
• applications you’ve made for credit cards, hire purchases and other loans
• details of your loan applications (but not whether your application was successful or not)
• bills you've defaulted on, even if you eventually paid up after the default was listed with the credit reporting company
• records of any ID you’ve reported lost or stolen
• insolvency information including proceedings relating to bankruptcy, No Asset Procedures and Summary Instalment Orders.  

Your Veda Advantage file will also include your “VedaScore”. This is a summary of your risk profile which is based on your financial behaviour (recorded in your credit report) compared to the average of other borrowers.

At present, credit files are based on negative information rather than positive. So if you've been meticulous in paying bills and keeping your finances in order, it won't be obvious from your file – that’s because this type of “positive” information is not allowed to be collected (see “Positive report, below”). At best there might be a note saying "No adverse information could be found on the subject”.

Other big databases

Other companies which provide hire-purchase facilities or run store cards also have large credit information databases. Fisher & Paykel Finance provides credit facilities for retailers. Farmers department store holds information on customers with Farmers cards or hire purchase accounts as well as customers from other shops that Farmers provides credit facilities for, including Michael Hill Jeweller. Some other companies have similar databases.

F&P and Farmers don't sell credit information to third parties in the way Veda Advantage and Dun & Bradstreet do, and so are not credit reporters.

Positive report

Credit reporting is controlled by the Credit Reporting Privacy Code, which was issued by the Privacy Commissioner in 2004.

This code has been reviewed by the Privacy Commissioner Marie Shroff. As part of her review, she commissioned a reference group of stakeholders – including Consumer NZ – to discuss the operation of the code and how it could be developed. Positive credit reporting – where "positive" events such as repaying debts are included on the credit file – was discussed at length by the reference group.

We believe positive reporting could improve access to credit and lower credit costs for prudent consumers, making it an option worth looking at. The results of the review and whether New Zealand moves towards a form of positive credit reporting will be known this year.