Banks To Be Given More Power To Check Your Credit History

Your credit history is soon becoming more important than ever as from next January banks will have even more power to refuse you credit at will. Even a minor glitch in paying your utility bills could cost you your dream home.

The new proposed plan to allow credit reporting agencies to collect your credit payment history will – if it comes into effect – be costly for a lot of Australians who currently fail to pay their bills on time. The plan – currently under review in regards to privacy laws – can allow banks to follow up on any of your missed payments if credit is involved.

This means that any late payments will be noted on your credit file AND passed on to any prospective lender you seek in the future. Your file will be marked ‘black’ and can potentially stop you from getting a mortgage if the bank doesn’t feel you are to be trusted with the money lent to you.

The United States has allowed insights into credit repayment reports for some time now and many believe that this has negatively influenced lending habits. Some say that it isn’t because of the fact that you are paying late or have done so in the past, but because lenders are using this information to sell you more credit (money you obviously can’t afford to repay.)

On the other hand, people who manage to pay their bills on time will become a target for national advertising campaigns to sell them more credit in order to get them into debt. The Consumer Law Centre says: “In the US, where lenders have had access to much more information on people’s credit reports for many years, it is pretty clear that lending practices have been far more reckless than in Australia.”

If you ask me, that’s ridiculous as it can affect you in ways you can’t even comprehend. Take the case of one migrant who leased a rental home for a six months term. Little did the person realise that the hot water system used natural gas.

Therefore the woman didn’t remember any accounts. After moving out, two accounts – electricity and phone – were rendered for payment and paid. A serious credit infringement was issued on a gas account she believes she never received and, despite paying the $100, she can now not obtain credit.

Source: News.com.au

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