- November 29, 2012
- Posted by: admin
- Category: Finance News, Financial goals, First Home Buyer, Technology
Consumers will no longer be left in the dark about their credit rating thanks to reforms to Australia’s privacy laws.
Your credit rating is an important factor that lenders use to determine your suitability as a borrower, so being able to easily access your credit report as well as understand how your credit rating works are important issues for anyone wanting to apply for a home loan.
The amendments to the Privacy Act, which are expected to pass by the end of the year, will provide stronger consumer protection as well as provide lenders with greater access to information to facilitate a more accurate picture of an individual’s credit situation.
Currently credit reports include only basic personal information, application for credit over the last five years and details of defaults, court judgments and bankruptcy.
Australia is one of only a handful of modern economies that solely use negative credit reporting.
Under the proposed changes, credit reports can now include a lot more information: when a credit account was opened and closed; its current limit; the type of credit offered and the account repayment history over the previous two years where you may have previously been overdue or missed payments on credit cards or loans.
This comprehensive credit reporting is expected to significantly improve a lenders ability to predict and prevent credit defaults and make it easier for loan applicants with a favourable credit history to obtain finance.
As your mortgage broker the additional credit information will give us a better understanding of each of our clients, helping us to put you in the right loan first time, every time.
Obtaining a copy of your credit report
If you’ve ever applied for a credit or loan, there will be a report on you with a credit reporting agency. You should check your credit report every year to make sure there are no mistakes that could affect your rating.
Under our existing laws you have the right to find out what’s in your credit report and correct any wrong information. It won’t cost you anything to obtain a copy provided you aren’t in a hurry (there may be a charge if you need to obtain a copy in less than 10 days).
You could have a credit report with more than one reporting agency. The two main credit reporting agencies in Australia are Veda Advantage and Dun & Bradstreet. If you live in Tasmania, check with the Tasmanian Collection Agency.
Australia’s credit reporting system is being modernised. Here’s how it will benefit you:
• Organisations have an obligation to show evidence to justify disputed credit listings
• It will be easier to access and if necessary correct your credit report
• Credit reporting information cannot be collected about children
• The complaints process will be simplified – complaints can be made directly to the Privacy Commissioner first rather than the organisation.