Big Data and Your Credit Rating
There was a big change to Australia’s privacy legislation in 2013. There was a lot of controversy at the time, however, like many things these days, our attention gets diverted easily and often.
The rubber hits the road on that legislative change on the 1st of January 2015 and it impacts you.
Our credit providers will be able to view a lot more information about your credit behaviour.
Up until now, lenders could only see the following information about you;
- Your defaults (only over 60 days in arrears),
- Your insolvency history (ie bankrupt events), and
- Your credit applications (although they could not see if your application was approved or declined)
In 2015 (6 weeks) they will be able to see the above, and a lot more…..
- The date that your credit was opened or provided (in other words, if your application was approved)
- The type of credit that you have and what your credit limit is (in other words, if you have used up all of your credit)
- The date that a credit account was closed, and
- 2 years worth of month by month repayment history on each credit facility that you have.
Your repayment history will report like this (the boxes with numbers represent the days in arrears) –
Most of Australia’s lenders have agreed to provide your data to the credit reporting agencies. If a lender does not report this information they do not get to see the information from the other lenders. So it is just a matter of time before every licensed credit provider jumps on board.
We are not saying that this change is necessarily a bad thing. We could even see a situation where clients with good credit ratings are offered a better deal. However, we now live in a new world of big data. Keeping your credit rating clean has never been more important.
Rod Holt is a Personal Mortage Advisor with Smartline and is based in Dunsborough. He has helped a lot of our Nannup Real Estate clients obtain finance to get into their new homes and investment properties. To contact Rod, you can visit his web page or call him on (08) 9759 1233.