Planned Changes To Credit Reporting

The way that credit reporting will be done in Australia is changing. The government recently confirmed that it will amend the Privacy Act as directed by the Australian Law Reform Commission.

These changes will include a persons history of repayment in their credit report. What this act means for most consumers is that your credit information will be examined more thoroughly then it has in the past. It will include a more extensive look at the type of credit you have applied for and what kind you currently carry. It will also take a much closer look at your payment history. Those who have missed payments in the past will be subject to more intense scrutinization and possibly less ability to get credit. This will give banks the ability to better understand a customers situation when they apply for credit cards including balance transfer credit cards which can be associated with customers who have existing unpaid debt.

Credit reporting on repayment history will include the past two years of payments. It will show when payments were due and whether or not those payments were made on time or were defaulted on. It will also include how the number of months the payments were in default. The Australian Law Reform Commission believes and that this information will aid in credit lending and that the benefit of the data is greater then the risk to privacy.

Additional information to be included in credit reporting:

1. Which kind of credit account, be it mortgage, personal loan, credit card, or other was opened.
2. When, by date, the account opened up.
3. What the credit limit is on each open credit account.
4. What date an account closed.

All information is to be deleted within two years of the close of an account. This is a sticky topic because different companies consider accounts closed at different times, either closed when the final payment is made or leaving them open until they are physically cancelled. Our Australian government is requiring that the credit reporting industry sets standards for determining this information.

Other changes in credit reporting:

• The Government will change the protection of credit reporting to include the purchase of residential properties for investments.
• Small businesses that are credit providers or reporting agencies will have to comply with the Privacy Act.
• Credit reporting agencies are not permitted to keep or disclose information about foreign credit providers or foreign credit.
• Overdue payments of less then $100 are not allowed to be listed by credit reporting agencies.
• Agencies will be allowed to list bankruptcies and include whether the bankruptcy was voluntary or forced.
• The collection of sensitive information will not be permitted.
• Credit providers must show due diligence in notification of outstanding debt before is can be listed on a credit report.
• Direct marketing campaigns are not permitted to use credit report information.
• An individual who has been a victim of fraud or identity theft will be allowed to point it out on their credit report.
• Identity verification through credit reporting will be allowed under the AML/CTF Act.

The exposure draft legislation for the credit reporting act should be available in early 2010. At that point there may be further discussion on the bill.

Comparison of our Top Credit Card Offers

		Interest Rate (p.a.)	Balance Transfer Rate (p.a.)	Annual Fee	Cash Advance Rate (p.a.)
Bankwest Breeze MasterCard	A low interest rate on everyday purchases with a low balance transfer offer	0% for 6 months (reverts to 10.99% )	4.99% for 9 months	$49	21.99%
Citibank Clear Platinum Card	A low interest rate offer on balance transfers and purchases	11.99%	0% for 12 months with 3% handling fee	$99	21.74%
St.George Vertigo	An introductory offer on balance transfer and a low annual fee	13.24%	0.99% for 6 months	$55	21.49%
Virgin Flyer Credit Card	Earn 1 velocity point per $1 spent, plus an introductory offer on balance transfers	20.99%	1.9% for 12 months	$50 (for first year thereafter $99)	20.99%
Westpac 55 Day Credit Card	No annul fee for the first year with a low rate on balance transfers and purchases	0% for 5 months (reverts to 19.59% )	3.99% for 6 months	$0 annual fee for the first year ($30 thereafter)	21.49%