The comprehensive credit reporting system gives New Zealanders more power to demonstrate credit worthiness and manage their credit profile.
- Highlights good credit behaviour: You will be able to demonstrate recent good credit behaviour because the Comprehensive Credit Reporting system records if you have made your credit payments on time.
- Faster recovery from adversity: You may improve your credit profile more quickly after an adverse financial event by showing good credit behaviour, potentially countering the impact of a default which may be up to five years old.
- Quicker to establish a credit report: For individuals new to consumer credit, the use of comprehensive information means that you can build credit worthiness more quickly. For example, if you are a young person or a recent arrival from overseas.
- A more balanced system: It is a more balanced and transparent system for consumers who already have a good credit history, as well as those who previously had trouble meeting their financial commitments – as it may enable them to access quality credit where they may not have been able to previously.
- A better deal with providers: With more complete credit bureau information and monthly updates, having a credit profile and showing good credit behaviour may become important in accessing credit at the best price.
From a consumer perspective, this repayment history could demonstrate whether current and/or recent financial commitments have been met or not. In an instance where a consumer, for example, loses their job and the situation results in payment defaults being loaded onto their credit file - these payment defaults remain on their credit file for five years.
Repayment history gives the consumer the ability to demonstrate they have rehabilitated their credit behaviour and facilities e.g. home loan, credit cards, personal loan etc. by showing a clear repayment history over a period of up to 24 months. This may then allow consumers' access to quality credit (assuming sufficient capacity to repay) notwithstanding the presence of payment defaults.
As it will take time for this new credit data to build up, the above benefits are likely to take some time to evolve.
From 1st April 2012 additional information was permitted to be collected, held and disclosed by credit bureaus. Once this data has been supplied by credit providers, your credit history will include positive information such as:
- Type of credit account i.e. credit card, home loan etc.
- Amount of credit extended (limit) e.g. $5,000
- Capacity of individual (such as account holder, joint account holder or guarantor)
- Status of account (Date account opened/closed)
- Details of credit provider i.e. the name organisation / business the account is with
- 24 months repayment history
This is in addition to the existing negative information on your credit report such as:
- Personal details – name, address and date of birth
- Credit inquiry details
- Overdue debts like Payment Defaults (paid and unpaid)
- Court judgments
- Insolvency data
- Records of any ID reported lost or stolen
There are now more reasons to actively manage your credit profile so that you are well positioned under the new Comprehensive Credit Reporting System. You can track your credit reporting information through My Credit Alert product (this is a 12 month subscription) which includes your credit report.
In addition, you are also entitled to get a copy of your credit report for free (to be supplied within 10 business days) or if you require this more quickly for a modest amount (to be supplied within 3 business days) – you can find out more on our Products page.
From 1 April 2012, the credit reporting law changed in New Zealand. Certain credit providers will be permitted to provide information about customers’ existing credit accounts to credit reporters. This new information will be included on credit reports.
The new details to be reported may include the amount of credit granted and, on a monthly basis, whether due payments have been made.
In addition to providers of financial credit – banks, building societies and finance companies etc. – certain providers of non-financial credit are permitted to provide account information to credit reporters. Those include gas and electricity retailers and telecommunications service providers.
As this is a major change from previous practice, credit providers must either get new authorisations from customers, or, if relying upon existing valid authorisations, must notify the affected customers of the new arrangements.
If you are a customer of a credit provider that intends to report the additional information to a credit reporter you may expect to receive a notice explaining the changes.
Not all credit providers will provide account information to credit reporters. It is a business decision for each provider. Some may decide not to report information for some years or choose not to do so at all.
Credit reporters that do intend to provide account information to credit reporters need to make a number of changes to their IT systems and business processes. In some cases this may take many months or more than a year. In cases of delay, the credit provider will need to decide when to provide notice to customers – some may do so many months before they are ready to actually start reporting information.
Accordingly, notices may be expected to arrive any time from about February 2012 to the end of March 2013.