Credit Reports To Provide A Fuller Picture

Thur, 21th Aug, 2008

DEBT and credit agencies could soon have access to more detailed information about people's financial affairs, after a major review of Australia's privacy laws.

Anyone who applies to borrow money or wants a new line of credit could soon have all their credit details made available to the lender.

The new rules are set to allow information about other credit accounts or facilities, even those that are not in default.

This compares with the existing law which only allows access to bad debt or bankruptcy information, known as "negative'' reports.

The proposed expansion of existing credit reporting comes after a two year review of Australia's privacy legislation including the laws surrounding the information banks and credit agencies can collect and store.

The recommendations by the Australian Law Reform Commission (ALRC) aim to help cut the number of loans made to people who can't afford them, which in turn could reduce bad debts.

ALRC president David Weisbrot said the additional information on someone's credit file would help reduce the risks to lenders and credit suppliers.

Several new pieces of information have been proposed to be added to credit files including: type of credit, which lenders, date accounts were opened and closed and the credit limit of each account.

Consumer group, Consumer Action Law Centre welcomed the recommendations but warned the banks and big lenders would try to push the government for even greater disclosure of people's private information.

"The credit reporting recommendations represented a fair, sensible and principled stance in the face of a massive and concerted campaign by the credit industry,'' Consumer Action Law Centre policy director Nicole Rich said.

"Lenders and credit reporting agencies argue that allowing more information to be kept on credit reports would allow them to lend more responsibly but this does not mean they would do so in practice,'' she said.

"We have been concerned for a while that lenders were using people's credit reports not only to assess them for a loan but also to pre-screen them for marketing offers.''

Debt and credit reporting agency Dun & Bradstreet also welcomed the recommendations as helping to provide a more detailed credit reporting system.

"The Australian credit market has changed dramatically over the last decade. The volume of credit applications and range of available products are far greater than ever before but our credit reporting laws have not kept pace,'' D&B chief executive Christine Christian said.

Source: http://www.news.com.au/