Changes to your credit report that you need to know.

When you apply for a loan or a credit card the lender will conduct a credit check on you, when they do this they have certain information about you that can indicate if you will be good and pay your bills or not.   The proposed amendments to the Privacy Act regarding credit reporting will change what information these organisations can see about you.

The changes allow the following five new kinds of personal information:

·         the date the credit account was opened 

·         the type of credit account opened

·         the date the credit account was closed

·         the current limit of each open credit account; and

·         repayment performance history about the individual.

What does this mean?

1.       If you are someone who forgets to pay things like the credit card, personal loan or home loan on time then you really need to change this because this will have a negative effect on your credit report and may stop you for applying for something important in the future like purchasing a property.  These records can go up to 2 years back so it will be easy for a lender to judge money management skills and therefor decide whether or not to give you credit.

2.       You can no longer lie to the bank.  In the past people have been able to not disclose what actual loans or credit cards they have. For example, someone could have applied for a $10,000 credit card but not told the lender they already have $40,000 in cards that they are struggling to meet repayments on.  This allows lenders to be more responsible when it comes to lending money.

I think that in the short term there may be a small group of people that will be disadvantaged by these changes because our system hasn’t punished these people for paying late before.  Generally speaking these are the types of people that have poor money management skills or they simply are not in a position to borrow more money.

On the upside it will influence more people to spend more time on managing their money which can lower the high personal debt levels Australian’s own.   The decision making process of lenders will now be more transparent which means less blame can be pointed their way.  Our problems with debt are behavioural and I believe each individual holds an amount of self-responsibility; legislation like this could contribute to the changing of the tide in this area.

Do you think this will impact people you know?  Maybe you disagree with some of the things I've written.  I'd love to hear your opinions on the topic.

 

For me info please read the article: http://www.langes.com.au/consumercredit/2012/07/20/new-privacy-credit-reporting-provisions/