Australia has been lagging behind most developed countries in only recording negative data like defaults, on our credit history. This will all change from March 2014 when Comprehensive Credit Reporting commences. From Dec 2012 there has already been more data recorded, more often, and on all of us. The 5 new items being recorded are: the date the account was opened and closed; current limit and nature of the account and your payment history. The last being a record of every payment made – both on time and late. Note: A partial payment is recorded as a missed payment and a late payment will record how many days late you are. The amount of the payment is not recorded.
The idea is to give lenders a better picture of your overall credit behaviour. This enables them to more accurately price in the risk of dealing with you. Better payers should get lower interest rates and more choice (and vice versa). You see, we’ve all been paying a little extra interest to cover the less reliable or unfortunate who struggle to meet repayments and default.
One advantage is for migrants and the young with little or no previous credit history. Also, those with excellent payment records can now display their credit worthiness with positive data. This does not mean a single late payment will blacklist you. We’re all away on holidays or forget a bill once in a while. Rather it will display patterns of missed payments and signs of overcommitment and credit stress earlier.
In our experience at SOS Debt Solutions, most people delay seeking debt assistance until they have defaults and are being pursued by debt collectors. By then, many options are closed. Banks generally won’t consolidate your credit cards into a lower interest personal loan if you have defaults. You usually can’t refinance your home loan to include higher interest credit cards and loans either. However, Debt Agreements are still available to you and, in fact, are only open to people who are behind in their repayments.
It’s clear our credit behaviour is already being monitored more closely, so making your payments on time is now more important than ever. Commit to paying those bills before they’re due. It could save you more than you think!
SOS Debt Solutions deals with these issues on a daily basis, finding solutions for people in a huge variety of difficult debt situations. Contact us here or Free call us now on 1800 767 332 if you’d like to discuss your best solution.