In Australia, just like in most other nations, credit reporting is considered the primary method for assessing the credit worthiness of individuals and companies. The information generated serves as the basis for lenders and financial institutions for approving and disapproving applications for loans and other related financial products/services. The same data is also used in setting of credit card limits and interest rates applied on personal loans. This is why a clean credit file is so critical for people trying to secure credit in today’s restrictive financial markets.
Credit reporting in Australia is covered by the Privacy Act and is backed by the Credit Reporting Code of Conduct. Many problems arise due to numerous loopholes in the legislations covering this practice. This is not unique to Australia. In 2008 alone, there were up to 295 recommended amendments to the national credit reporting system. Credit reporting may not be currently as perfect as it should be, but public and private sectors are logically combining their efforts to eliminate the flaws for the protection of consumers. Successful credit repair is based on identifying errors and inconsistencies in the process followed by credit providers when entering negative credit listings such as payment defaults and clearouts.
The authorities constantly look at the credit reporting industry as complaints from consumers continue to arise. Inaccurate information has always been the most common complaint filed. Consumers seem to be most anxious about accuracy of consumer reports. Unfortunately, credit reporting is not totally immune from possible errors because information is sourced from numerous agencies, lenders, and businesses. Once a negative credit listing is recorded on a credit file it will remain for up to seven years, this can be devastating for people trying to secure finance.
It should also be noted that many consumers only become aware of their credit report when their credit applications are turned down on the basis of the credit history. Such disapprovals lead them to seek a copy of their credit report. It may take time to correct errors as it may involve a long verification process. Thus, consumers are most annoyed by such a problem. It is also tedious to contest records from lenders and financial institutions. This is when the services of a repeatable credit repair company such as Clean Credit are so valuable as having an in-depth knowledge of the relevant legislation is imperative when repairing a credit file and having negative listings such as payment defaults removed from a credit file. Repairing a credit file also has the effect of increasing a credit score.
Consumers should be more concerned about unauthorised and inappropriate disclosure of personal information, which is rampant across the credit reporting industry. According to several experts, there are reasons to worry about the extent of personal information listed and disclosed through credit reporting. Such data may possibly be accessed by unscrupulous parties, which intend to defraud and use personal information inappropriately.
The consumers have no idea how their credit reports are used by businesses. Loan providers, lenders, and financial institutions could readily access such reports for whatever purpose they may have, aside from credit investigation. Needless to say, there could be serious issues that may arise from this practice, though most consumers are not currently aware of.
The Privacy Act serves as a shield, which in turn prohibits comprehensive credit reporting. That is why credit reports mainly focus on negative information about consumers. ‘Positive credit reporting’ would remain a remote possibility in Australia as the federal and state governments still see no need for such.
Moreover, credit reporting in Australia, just like in other countries, is within an ever-changing landscape. There are constant and continuous efforts to introduce amendments and changes to the current industry practices. In the end, consumers would always be the main priority. However, it would be more advantageous if they would be more aware of the current credit reporting industry long before they encounter problems with their credit reports.
Clean Credit Pty Ltd