Protect your credit information

Creditworthiness is the most important part of finance availability and a good history can mean quick and easy access to low rates. Your credit history needs to be monitored and protected – nowadays every part of your online life may play a part in the difference between a simple and positive experience, or a bad one.

Australia is undergoing a change from ‘negative’ to positive credit reporting (a.k.a. Comprehensive Credit Reporting or CCR). Until 2014, credit agencies could only report the fact that an application had been made (not the presence of a loan), along with payment defaults or serious credit infringements. The Privacy Act was amended in 2014 and although the take up was slow, the new ‘positive reporting’ standards are well underway – a file on each individual and business is built up each month, which contains full account history, date opened (and closed), credit limit and 24 months of payment history, recorded as whether on time or late. The result is sure to be a massive, individualised data base, collated to make up a credit score based on positives and negatives. It is vital to ensure the information that goes into it is both accurate and to your best advantage.

Things to be aware of about your credit file;

• information can only be provided and shared by licenced credit providers
• ‘Utility’ (gas, electricity, telephone) are exempt from reporting, but payment defaults continue to be reported
• each entry serves to make up a credit score – which in future is likely to be the holy grail of loan availability and pricing
• There are 4 major credit reporting agencies – each serves different market segments, but share information to condense into a credit score

Each time you make an application, or a payment for a credit card or other loan, your file and credit score will be built upon. Needless to say, any late payments will bring down your score, and a consistent record of on time payments will build it up.

Do                                                                                                        Don’t

Pay bills on time                                                                                Access ‘free’ finance quotes

Be careful who you give your personal details to                       Credit shop

Consider subscribing to a credit file monitor                               Use ‘payday’ lenders

Remember that payment defaults will remain for 5 years        Use credit fix services that promise the world, the reputable companies will                                                                                                               honestly assess your situation

If you would like any further information about the Privacy Act or credit reporting in general contact us for a confidential conversation.