Big brother is watching you…
New laws mean a lot more data on your personal spending habits is captured and added to your credit file enabling anyone who does a search to access information on what your commitments are and whether or not you are meeting them on time.
The government says we are a free society but the new laws passed by the Federal Parliament on 29 November 2012 mean that additional information will soon be available on consumer credit reports.
Until now, consumer credit reports in Australia have only been allowed to include identity details, credit enquiries and negative data such as defaults, court judgments and bankruptcies.
However from March 2014, when the Privacy Amendment is due to come into effect, your credit report could contain additional information that can be viewed by credit providers when you apply for credit. The new data elements include:
- Credit account information (eg. account status, open and/or closed date, credit limit)
- Type of credit and account (eg. credit card or revolving line of credit)
- Up to 24 months of repayment history information for commitments with a financial services organisation (eg. details of whether your payment obligations have been met or not)
- Credit provider details
What does this mean for you?
More data will soon be available on your credit file which will demonstrate how well you meet your banking credit obligations. If you pay your bills on time, this change will have no impact on your credit standing.
If you don’t pay your bills on time, credit providers will see your payment history and will be able to decide whether or not they wish to extend credit to you based on this information.
Importantly, if you’ve had a payment issue in the past, this information will allow you to demonstrate to credit providers that you’ve rectified your slip up through a series of on-time payments.
Changes to credit reporting laws mean that some organisations will be able to collect more information about people’s creditworthiness. This includes information about whether a person has made or missed a payment on a credit card or loan. If a person misses making a payment from as early as December 2012, it will be able to be recorded on their credit record and may affect their ability to access credit in the future.
What should you do?
First, it’s important you take the time to ‘order a copy of your credit report’and familiarise yourself with the information it contains. It’s worthwhile doing that now, even though the new information won’t appear on your file until 2014.
Make sure you check that all of the data is correct – if you note anything on your file that you believe shouldn’t be there you can contact the credit provider or D&B’s Public Access Centre on 1300 734 806.
Do we live in a Free society?
With the steps that the government has taken in passing this law you would need to ask yourself the following questions:
- With this information have they made a level playing field for finance institutions?
- Is it fair trading?
- Is this going to retract business in this country?
- If government starts with this law where are they going to finish?