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Credit record changes

From 1 April 2012, lenders will be able to find out more about your bill-paying habits.

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If you miss paying your power, phone or some other monthly credit account, the non-payment may be recorded on your credit record and held there for two years. On the plus side, never defaulting on your credit-account payments will be reported as well.

The changes come about because of an amendment to the Credit Reporting Privacy Code 2004.

Prospective lenders will now have a fuller picture about your ability to repay a loan or credit. In announcing the changes Privacy Commissioner Marie Shroff said “we’re all giving up more financial information about ourselves but, overall, we can expect to see some benefits. There is a strong economic case that giving lenders more information of this sort will support more responsible lending”.

Encouraging more responsible lending is one of the reasons that Consumer NZ supports this move. We also hope it’ll encourage mainstream lenders to start offering credit to a wider range of borrowers who will then be less likely to use fringe lenders or other expensive forms of credit. As well, it might prompt some people to get on top of their credit repayments – and people with particularly good repayment histories could be able to obtain credit at better rates than in the past.

The changes will allow firms such as Veda and Dun & Bradstreet to collect “comprehensive” credit-repayment-history information and include it in a credit report, which they can then release to lenders who subscribe to their services.

Credit reports won’t list defaults under $100; and you’ll be able to “freeze” the reports if fraudulent credit accounts are set up in your name. You’ll also be able to shop around for credit without this affecting your credit score.

Guarantors will be given clearer safeguards to make sure they know about a default before it’s listed in a credit report.

More than ever you need to understand your credit-reporting rights. So a new Summary of Rights has been published explaining what credit information can be collected, who can access it, and what authority is required for access. It’s been written in plain English and translated into Maori, Samoan and Chinese. You can also find out how to dispute inaccurate information.

More information

Consumer credit reporting companies