Have you ever missed a credit card payment by accident? Have you ever lost mobile phone bill in a pile of mail on your desk? Beginning in 2014 these oversights are going to hurt your chances of acquiring any type of credit that you may be shopping for.
2014 brings major changes to the table. In March a new privacy amendment to Australia’s Privacy Act comes into effect that will be showing creditors more than you might want them to know. This Amendment gives creditors a better view of your ability to handle your financial commitments, which of course will help them determine whether or not they lend to you. It will also allow for a better coupling of your credit needs with lender products, which decreases the likelihood that you will borrow more than you can afford to repay.
When you apply for credit, there are several factors that creditors are investigating. They want to see how timely you are at paying your bills. They want to know how many times you have applied for credit, what type of credit, how much credit, and how well you paid it back. All of these factors equate to a risk score which will determine whether or not you purchase a new car or a new home, a new credit card, or mobile phone plan! A high risk score will also sometimes result in a very high interest rate.
Everyone has defaults in their history. The problem is that the leniency once extended for those situations are no longer so easily explained away.
As the credit game changes, the definition of default may change in direct relation to the amount of information available to lenders, for example; formerly if you were 60 days late to pay on a credit obligation, you were in default. Now, it could be as little as 5 days that earns you an “Unpaid” stamp. It is in your best interest to pay your bills on time and also to see and understand the same reports that the creditors are looking at. Records as old as 2012 can be considered under the new rules, so if you had any late payments, it’s best to figure out where you stand now.
If you want to order a copy of your CRAA, you can do so by logging into this URL www.veda.com.au/yourcreditandidentity and order a copy for free. For a small fee, you can order an immediate copy. Do a sweep of your history and take steps to remediate any issues that you can see. Additionally, make sure that your personal information including former addresses is current and correct. Take a long hard look at your budget and how you schedule your payments, because now more than ever, it will affect your future in significant ways.