From Stuff 24/3/2012
The rest of the article is here.
Skipping a bill or a credit card payment does not usually seem like a big deal.
Once the rent has been paid and next week's salary is in, catching up is not often a problem.
But, starting next Sunday, missed and late payments will have the potential to affect people's credit ratings.
Banks, finance companies, telcos, electricity, gas and insurance companies will be able to collect and swap information showing how much credit someone has and how they are getting on with repayments.
A few hiccups should not hurt anyone's ability to borrow money for a house, car or holiday in the future, says credit reporting bureau Veda.
But a pattern of skipping – even on small payments – could result in a negative score.
Companies stress that nothing will happen immediately – it takes months or years to build up a credit history and lenders are not yet ready to collect the information.
Once lenders have notified their customers that they are going to start, they can hold the information for up to two years.
First up are likely to be four "top end" banks and finance companies, which, Veda's John Roberts said, were looking to supply it data in the middle of this year.
Within a year other lenders would join, and possibly later on telcos and power companies.
The information will be swapped on a "whoever gives, gets" basis under a system worked out by umbrella body the Retail Credit Association.
But first companies need to get their IT systems ready, says RCA head Justin Kerr.
"I reckon in about three or four months' time if a consumer gets a copy of their credit file they will start to see information," says Roberts.
Kiwibank, Westpac and ANZ say they will take part although they can not yet say when. ASB and BNZ said they were looking into it.
At the moment, it is all too easy to forget there is a credit file held somewhere in your name.
But consumer and privacy watchdogs say that needs to change.
It is not very easy for an ordinary person to work out how they will be scored under the new system. Paying all bills on time is obviously the best approach, but how much leeway is there? New Zealand's two big credit agencies, Veda and Dun & Bradstreet, will not disclose the exact formulas they use to assign people credit scores but they did provide some guidance.
"If you have missed a payment on your credit card it will show as a one month missed payment. If you catch it up the next month it will show that you've caught it up," says Roberts.
He says the pattern of payment matters more than the amount, and one or two misses should not matter too much.
Once the rent has been paid and next week's salary is in, catching up is not often a problem.
But, starting next Sunday, missed and late payments will have the potential to affect people's credit ratings.
Banks, finance companies, telcos, electricity, gas and insurance companies will be able to collect and swap information showing how much credit someone has and how they are getting on with repayments.
A few hiccups should not hurt anyone's ability to borrow money for a house, car or holiday in the future, says credit reporting bureau Veda.
But a pattern of skipping – even on small payments – could result in a negative score.
Companies stress that nothing will happen immediately – it takes months or years to build up a credit history and lenders are not yet ready to collect the information.
Once lenders have notified their customers that they are going to start, they can hold the information for up to two years.
First up are likely to be four "top end" banks and finance companies, which, Veda's John Roberts said, were looking to supply it data in the middle of this year.
Within a year other lenders would join, and possibly later on telcos and power companies.
The information will be swapped on a "whoever gives, gets" basis under a system worked out by umbrella body the Retail Credit Association.
But first companies need to get their IT systems ready, says RCA head Justin Kerr.
"I reckon in about three or four months' time if a consumer gets a copy of their credit file they will start to see information," says Roberts.
Kiwibank, Westpac and ANZ say they will take part although they can not yet say when. ASB and BNZ said they were looking into it.
At the moment, it is all too easy to forget there is a credit file held somewhere in your name.
But consumer and privacy watchdogs say that needs to change.
It is not very easy for an ordinary person to work out how they will be scored under the new system. Paying all bills on time is obviously the best approach, but how much leeway is there? New Zealand's two big credit agencies, Veda and Dun & Bradstreet, will not disclose the exact formulas they use to assign people credit scores but they did provide some guidance.
"If you have missed a payment on your credit card it will show as a one month missed payment. If you catch it up the next month it will show that you've caught it up," says Roberts.
He says the pattern of payment matters more than the amount, and one or two misses should not matter too much.
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