Major Credit Reporting Changes


PM – By Business Reporter Pat McGrath, Updated Tue 11 Mar 2014, 8:25pm AEDT
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Photo – Credit reporting changes mean a five day late payment will be on consumers’ credit records. (Giulio Saggin, file photo: ABC News)
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Map – Australia

Consumer groups are warning that Federal Government changes to credit history reporting rules will make it more difficult for low-income Australians to get loans.

Under the changes being introduced this week, banks will be required to report payment defaults more thoroughly and more regularly.

Until this week lenders have only been required to report a customer default on loans when they are more than 60 days late in their payments.

However, from Wednesday, more detailed information about credit card and loan repayments will be handed over to credit reporting agencies.

The Australian Retail Credit Association says the new rules offer a clearer picture of people’s credit records.
Steve Brown from Dun and Bradstreet, one of the biggest credit agencies, thinks the changes need to go further.

He believes missed payments on electricity, gas, water and phone bills should also be recorded.
“It would allow people who don’t today have access to a financial service credit product to demonstrate that they have got a good track record of meeting non-banking and financial service credit products,” he said.

David Grafton from Veda, another big credit agency, says there are even more ways to get a clearer picture of a person’s credit record.
“Information on somebody’s balance relative to their credit limit would be very important as a predictor of potential credit stress,” he said.
“It’s a very powerful predictor, if you run a statistical exercise then you can show that that would be immensely helpful to credit providers.”