The Credit File: What Information Does It Contain?
There has been significant changes to Australia’s credit reporting however many of these changes will not come into effect until March 2014.
A Credit Reporting Agency will now be known as a Credit Reporting Body (CRB)
A new term has been created called “Affected Information Recipients” (AIR) this is a term used to describe various related third parties such as Mortgage Insurers and trade insurers.
These new changes are covered in an addition to the Privacy Act known as PartlllA and a new document called the Credit Reporting Code (CR Code)
From a credit repair standpoint a number of these changes are highly relevant as they have the potential to change how credit repair companies like Clean Credit approach helping people to restore their credit files and improve their credit scores.
One of these changes is additional information will be recorded when an application for credit is made, namely:
- The type of consumer credit applied for
- The day on which the consumer credit is entered into and on which it is terminated or ceases.
- The terms and conditions of the consumer credit
- The amount of the credit secured and the maximum amount of credit available, eg a line or credit or redraw.
- The repayment history
- Whether or not the individual has met an obligation to make a monthly payment that is due in relation to a consumer credit.
This is a far cry from the current amount system that only records the name of the credit provider along with the date and amount applied for, currently there is no reference if any credit was actually advanced.This fact is a real problem for credit providers reviewing an applicant’s credit activity to determine their credit worthiness as they are somewhat blind to the outcome of previous applications for credit made.
One interesting change is a credit provider that breaches legislating in relation to interfering with the privacy of an individual may be subject to an investigation by the Commissioner or even face civil penalties.
In the case of a credit provider listing a Clearout or Serious Credit Infringement the following changes now apply:
- The credit provider has taken reasonable steps have been taken to contact the consumer about the event
- At least 6 months have passed since the credit provider last had contact with the consumer
Currently a negative credit listing such as a payment default can only be removed if it was made in error or the credit provider did not follow the required process prior to recording the event. This is still the case however a credit provider may now also remove a listing that they deem to be “Irrelevant” having regard to the purpose for which the information is held. This is an interesting addition to the possible reasons for removal however only time will tell how this will apply to having a negative credit listing removed from a credit file.
Under these new laws, namely the Credit Reporting Code and new part of the Privacy Act known as PartlllA, it will be the Credit Reporting Body, formally known as a Credit Reporting Agency or a credit provider to take responsible steps to resolve and correct credit information that is inaccurate, misleading, faulty or inappropriately disadvantages an individual. A credit provider or Credit Reporting Body that receives a complaint must investigate the matter and make a decision within 30 days.
I feel that many of these new credit reporting laws are positive and will go a long way to improve what is currently a highly floored system.
John Dickinson
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