Whether you’re buying a home, connecting the power or getting a credit card, most of us apply for credit at one time or another. How we look after it has always been important but recent changes to the law make it more important than ever.
Until recently, your credit report only included limited information such as your identity details and ‘negative’ information such as any loan defaults or bankruptcy.
Since 1 April 2012, credit providers (like banks, finance companies and some utilities) have been allowed to share more information with credit reporters. This could include the amount of credit you have and how you pay it back. So, in the future, your credit report will also show positive things - like a great track record of paying on time.
For more information, please download the Comprehensive Credit Reporting Brochure.
"Credit" is a term used to describe any money on loan, or products or services before payment. Examples of "credit" include:
Credit reporting is the process of gathering information about your credit history to create an overall picture of how well you look after credit. This is done by regulated credit reporting agencies and is sometimes called a credit report or credit file.
If you apply for credit, the relevant credit provider (organisations such as banks, finance companies and some utility companies) usually approach a credit reporting agency for information about you relating to your credit situation like whether you have been made bankrupt (sometimes known as a "credit check"). In most cases you have to provide consent before a credit check can be performed. In turn, organisations that provide you credit will also update credit reporting agencies with information about you, such as whether they have had to take formal steps to recover an amount from you.
Prior to 1 April, your credit report only took into account "negative" information, such as someone having to take formal steps to recover a debt from you. Now, under changes to the Credit Reporting Privacy Code, eligible credit providers (like banks, finance companies and some utility companies) can share more information with credit reporting agencies on an ongoing basis, such as the type and amount of credit you have and whether you make your repayments on time.
ASB recognises the positive benefits of Comprehensive Credit Reporting and will be participating from 1 September 2012.
Under the new rules ASB may provide credit reporting agencies with additional credit account information such as:
The Credit Reporting Privacy Code is essentially New Zealand's law around Credit Reporting. Technically it's a code of practice issued under the Privacy Act 1993. It applies to all credit reporting agencies and is legally enforceable in the same way as the Privacy Act.
These changes have been introduced by the Privacy Commissioner to help New Zealand credit providers make more informed decisions. They will also bring New Zealand into line with many other countries that already have Comprehensive Credit Reporting. Research from overseas suggests that this type of credit reporting can help develop more competition among credit providers and give more people access to reputable credit providers.
If you're simply having trouble remembering when payments are due, you could think about setting up Automatic Payments or Direct Debits. When it comes to your ASB credit facilities, we also have other tools to help you manage money including alerts and Track My Spending. For more information, ask at any ASB branch or call 0800 803 804.
You can find more information on the Privacy Commissioner's website or at one of the three registered credit reporting agencies below: