There has been many changes to the credit reporting platform recently. One of a largest being the provision for a lot more information to be contained in a person’s credit file.
Prior to these changes a credit file had little information for a credit provider to base a decision on if to approve or decline an application.
When someone made an application for credit basic information would be recorded such as:
• The name of the credit provider
• The date of the application
• The amount of the credit applied for. What would be missing however was critical data such as if the application was approved or declined or if approved if credit actually extended. This meant that while a credit provider could see an applicant’s past credit enquiry history they were somewhat blind to vital information.
The new credit reporting changes should see an end to this problem. Past credit enquires or applications will now not only contain the details of application but also if the facility was approved or declined along with a payment history for current active accounts.
This will give credit providers far more data and should help them make more appropriate credit decisions and also potentially save people from becoming over committed as credit providers will now be able to see how much credit a person really has and if providing more would be financially responsible.
One interesting point is in order for a credit provider to be eligible to view this additional credit file information they must also be able to record and submit this data to the credit reporting agencies for their own clients, if not this information will not be available to them. In other words to get it you must also be willing to give it.
Recording and supplying this data to the credit reporting agencies may prove quite difficult for some. Given the importance of a credit provider recording updated and accurate information at all times (Section 18j of the Privacy Act) they must have the systems to be able to record and supply large amounts of data quickly and correctly to the credit reporting agencies. Imagine how many credit applications the major banks would process every week and how many payments are made (or missed) on active finance facilities, now imagine trying to capture this data and provide it to the credit reporting agencies and you can begin to see how large this task really is.
One the more controversial changes to the credit reporting platform is the ability for a credit provider to list a late payment if a payment is as little as 14 days late. While 14 days seems like a short period of time it is longer than the past proposal of 5 days which was recently overturned.
Being able to list a late a payment and actually having the technical capability to do so are two very different things. Other than the banks and other larger credit providers it is hard to imagine many having the financial capacity to build new reporting systems just for this task.
This being the case it is possible that not all credit providers will have the full benefit of this increased data.
What does all this have to do with credit repair and a person’s ability to fix their credit file ?
I feel the more data held in a credit file the more room for error and the more errors the more people could be inappropriately affected when applying for credit. This being the case the requirement for people to be able to repair their credit ratings could be more relevant than ever.