10 May 2013
The credit habits of Australians will be scrutinised like never before when new credit reporting laws take effect in March next year, and a consumer advocate for accurate credit reporting warns, now is the time to make some big changes to protect your future.
CEO of MyCRA Credit Rating Repair, Graham Doessel says this is an important time to know about Australia’s credit laws, and to be careful with how you use and repay credit.
“Australian consumers are currently under the microscope with their repayments, and if they are more than five days late paying a loan or a credit card that will go on their credit file for two years and show up as of next year,” Mr Doessel advises.
“This information will be part of five new data sets to show up on your credit report – and Australians need to be credit savvy to make the changes work for them,” he says.
This new information for lenders is part of wide-sweeping amendments to Australia’s Privacy Act, which includes a new Credit Reporting Code of Conduct.
Mr Doessel outlines some things that every credit-active should know about our new laws:
What you need to know and do to be credit savvy
1. Pay on time, every time. Make repayments on accounts (such as credit cards and loans) on time to avoid having late payment notations recorded on your credit file. There is a five day grace period. It doesn’t have to be a big amount to impact you. Too many late payment notations may mean you’re refused credit, or offered a higher interest rate.
If you let your account go more than 60 days in arrears you will also be default listed. This listing will show on your credit file for five years, and applies to amounts over $150.
2. If you can’t pay, actively seek help. There will be new laws to help prevent you from being defaulted if you are under financial hardship. You need to make arrangements early with your lender, and this will be recorded on your credit file. If you make your repayments on time, you may be able to offset the variation. So there is a new incentive to get in and work it out with your lender prior to letting your accounts go into arrears and copping a default listing.
3. Take precautions when applying for credit. The volume of credit you apply for and the type of credit you apply for can hinder any future credit application you may make. Whilst it is a great idea to research credit before applying – you should only make a credit application you have full intention of pursuing. In addition, high interest’ or ‘bad credit’ loan applications may shave points off your rating.
4. Seek cautions credit limits. If you’re not using it, don’t have it is the general rule. If you take out a credit card or other line of credit, it’s probably not wise to opt for a lofty limit, but ask for an amount closer to what you intend to use. Any credit ‘rating’ may be reduced by credit limits which are too high.
5. Prevent identity theft. Understand how lucrative your personal information can be in the wrong hands, and take steps to keep abreast of how it can be at risk from identity theft, which can lead to the stealing of credit by fraudsters accessing your credit file. Victims can end up with defaults on their credit file and blacklisted from credit for 5 years.
New laws will allow you to place a ban period on your credit information if you believe you may be at risk of identity theft, which can prevent fraudsters from accessing credit in your name – so if you feel you may be at risk – acting quickly may prevent your credit file from being impacted.
6. Check your credit file regularly. With the new information, it will be more important than ever to check your credit file. Many people don’t know you can do this for free annually through the Australia’s credit reporting agencies and a copy is sent within 10 working days. There will be five new data sets of information available to Credit Providers who request a copy of your credit report. These will be:
1. repayment history information;
2. the date on which a credit account was opened;
3. the date on which a credit account was closed;
4. the type of credit account opened;
5. and the current limit of each open credit account.
It is up to you to ensure your credit file reads accurately.
7. Correct credit information which you believe is inaccurate, inconsistent or unfair. To offset the new information, new laws are currently being devised to make it fairer for those disadvantaged individuals to access and correct their credit report.
But beware, there will still be a requirement to work within and have knowledge of credit reporting law when disputing an inaccurate or unfair credit listing, and it is important to note, that Credit Providers and Ombudsman cannot advocate on your behalf. You can start by contacting your Credit Provider yourself to alter incorrect information, or you can seek help from a credit repairer or lawyer. You should take steps to rectify mistakes before the information has any bearing on a credit application you may make in the future.
After March 2014, if your Credit Provider disagrees with your request to correct your credit information, you can have your dispute noted on your credit file and this would be worthwhile requesting if you believe your listing shouldn’t be there.
Graham Doessel – CEO Ph 3124 7133
Lisa Brewster – Media Relations firstname.lastname@example.org
MyCRA Credit Repair 246 Stafford Rd, STAFFORD Qld
MyCRA is Australia’s number one in credit rating repairs. We permanently remove defaults from credit files. CEO of MyCRA Graham Doessel is a frequent consumer spokesperson for credit reporting issues and is a founding member of the Credit Repair Industry Association of Australasia.
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