The new regulations coming through from the changes in the Privacy Act in March of 2014 will allow for much more detailed information to be recorded on credit histories. Most lending institutions will comply and now more “good” or positive information will show up on a person’s credit history instead of only the “bad” or negative entries. It used to be that only negative entries like defaults, late payments and bankruptcies showed up when a person’s credit history was requested, but now the positive history entries will also show on the credit files. It can be very hard to get a loan when only negative credit history is available to a lender.
More Comprehensive Credit Reporting
Positive credit histories can help lenders get a fuller picture of a person’s credit file and also help that lender make a better decision on what kind of credit risk that person could be. When a customer has a better credit history they could possibly be offered a better deal on a loan or line of credit.
Having good credit ratings will help consumers recover faster from financial problems and it will be easier to maintain a good credit score. Creditors don’t just want to hear only the bad news anyway. Creditors used to have a very limited view of a person’s credit history. They only get to see the defaults, bankruptcies and credit applications and don’t have information about the approvals or disapprovals. Therefore with this limited view, it becomes a very one sided account of a person’s credit history. Now a more balanced credit reporting will be available and the lenders that are complying with the new system will be able to see this more complete view and they will also be required to make these entries about their clients.
Of the many changes made to the Privacy Act, the initiative to make credit reporting more comprehensive might be the biggest positive change that will benefit consumers, brokers and lending institutions. It might take some time for this information to start showing up on credit scores but when it does it will create a more transparent lending environment and help those who are focusing on getting approvals for their financial future.
Make sure your lending institutions have your latest credit report before you apply for any new loan or credit. If you think you have negative listings that were put there due to creditors’ mistakes in the past, you can take measures in cleaning up your credit file. You can also discard age old defaults that should have been removed long ago with credit repair. Contact a credit repair specialist like Clean Credit to tidy up your credit history so you can have a better credit reporting when applying for new loans.