New credit rating regulations find out who’s been naughty and who’s been good...
Next month, missing a credit card repayment will mean more than a ‘slap on the wrist’ letter in the mail and a possible fine. You’ll also leave yourself open to a nasty black mark on your personal credit rating.
The New Regulations
As of 12 March 2014, loan and credit repayment details are one of five additional pieces of information that lenders can pass on to credit bureaus as part of a new more comprehensive credit reporting regime. Similar to the country rating system, individuals will soon be slapped with a credit rating which financial institutions can use as a quick reference loan check along with other more comprehensive checks.
Know your limits
Be aware of ALL your cards and their limits. Even those ‘emergency cards’ that we keep in the deep dark corners of our purses and wallets. It doesn’t matter whether you have borrowed the full amount or not, it is automatically assumed that you already have. So keep an eye your card limits.
But it’s not all doom and gloom
As opposed to the current system where only negative aspects of a person’s credit history have been taken into account. Under the new regulations you can be rewarded for your years of good behaviour. A few minor defaults which in the past could prevent someone from obtaining a credit card can be outweighed by years of diligence in paying bills on time.
This is the first time Australian have a real incentive to manage their credit
Now is a really great time to assess your credit file and implement a routine to stay on top of your personal finances. You can obtain one free copy of your credit file per year and an additional copy if your loan application is rejected.
Your Report Card Do’s & Don’ts
How to GET a top rating
How to LOSE a top rating
An Eye on the future
Although these changes are a massive step for credit bureaus, they are still wanting more information. They are still lobbying to obtain further information on individuals. Credit balances, electricity and even phone bills are on your cards. With post-paid phone bills being among the first young people receive, now is a good time to teach your kids about the importance of managing their finances and their reputation.
For more information on the new regulations, what it will mean for you and other ways you can take control of your credit history, visit www.creditsmart.org.au
Ph: 1300 574 108