Forgot to pay that bill? It could cost you your good name
FORGETTING to pay the electricity bill could cost you your credit rating.
A Sunshine Coast lawyer believes the new changes to credit reporting rules will truly show who deserves to be approved for loans.
Federal Government changes to privacy laws, which came into effect yesterday, mean banks, credit agencies, utilities and telecommunication companies can have greater access to information about con sumers and their borrowing habits.
Consumer groups say the changes could lead to borrowers being charged more interest on loans if they fail to pay their bills on time.
Under the reforms, consumers who fail to make repayments on their credit cards, home loans, personal loans, car loans or other retail offers within five days of when they are due will have it recorded as late payment against their credit report for two years.
Previously, a black mark was recorded only against borrowers who failed to make several payments that amounted to a default.
Schultz Toomey O'Brien managing partner Travis Schultz said consumers and small business owners who relied on lines of credit should be wary of missing any payments.
He viewed the changes as a positive for consumers who were consistent with their payments.
"The old system was a negative reporting environment and we are now moving to a positive reporting environment where the idea is that good payers who are low-risk customers should find it easier to get credit and the people who deserve it will benefit," Mr Schultz said.
"From a consumer's perspective it will be more important than ever to pay on time and maintain that credit worthiness."
Consumer groups are warning that Federal Government changes to credit history reporting rules will make it more difficult for low-income Australians to obtain loan approvals.
But Mr Schultz said it was commonplace for creditors to assess each application on an individual basis.
He said it was also important for small business owners who relied on financial backing to keep on top of payments to avoid a black mark next to their name which could jeopardise an extension to the overdraft.
Do you think it's fair to have a black mark put against your name if you pay a bill only two days late?
This poll ended on 03 January 2015.
Yes, it just shows who should be accepted for credit and who deserves it
No, everyone makes mistakes and can forget to pay sometimes
No, it's just going to give banks a ridiculous reason not to approve loans
This is not a scientific poll. The results reflect only the opinions of those who chose to participate.