New credit rules - 5 days late - black mark on credit filecredit file

[Beanie Girl]

The banks loan application already asks you what your assets and liabilities are. Are you seriously suggesting that it's okay not to disclose properties and debts held by other lenders?

PT, no, I am not suggesting that it's okay not to disclose properties and debts by other lenders. The scenario I described could be one where you have acquired the 10 properties with different lenders after the initial 2 with the original bank.

Regardless, your credit file will reflect all mortgages, all credit liabilities you hold up to Mar 2014 even to the bank that you borrowed from for your first 2 properties. That is my point, ALL your liabilities will be laid bare for all to see when they ask Veda for your credit file come March. The banks have been preparing their IT systems all through last year to both provide this information and receive this information to/from Veda. With computerization so comprehensive and powerful, it won't take long before all information is synched.

MTR, hoping that your particular credit provider won't be providing information to Veda is like basing your hope on a wind and a prayer, no offense. It's better to assume the worst and assume that all your credit providers are providing information to Veda and work on a strategy from there.

 

[DaveM]

I agree that 5 days is a little harsh.. 14 days is more realistic. After all, tenants cant get a black mark until at least 14

I have an easy system for bill payment - as bills come in that arent on direct debit, they go into a holder on my desk. Every Sunday I go through them, schedule them via internet banking then file them away, takes 15 mins a week tops. Not much isnt on direct debit from either PPOR offset or credit card, so bills are usually rates notices or the CC statement.

 

[MTR]

.
MTR, hoping that your particular credit provider won't be providing information to Veda is like basing your hope on a wind and a prayer, no offense. It's better to assume the worst and assume that all your credit providers are providing information to Veda and work on a strategy from there.

No offence taken, just stating what I have been advised.

 

[The Fence]

+1 to what DaveM says above. ^^^

Easy peasy no excuses.

 

[Beanie Girl]

No offence taken, just stating what I have been advised.

Thanks MTR for not taking umbrage. Don't mean to offend anybody with my posts

It's a brave new world awaiting us if all credit providers decide to participate in information sharing in Comprehensive Credit Reporting (CCR). And I think they will. Who doesn't want to get their hot little hands on our financial data to better evaluate risk?

 

[fernfurn]

Lukily I have never had a tenant default on rent or do a runner, but I seriously think we should be able to notify Veda of any tenants who leave with outstanding debts.If we can be penalised and listed for minor infringements why cant tenants who leave $$$$ debts behind. These people are actually stealing and in some cases are serial offenders and should bear the consequences

 

[tobe]

Beanie Girl, that first bank is not going to have your credit report, and know about the other 8 properties until you give them permission to do a credit report, and you arent going to do that unless or until you apply for credit, and when you apply for credit, you need to disclose your assets and liabilities, usually.

Banks wont 'have' this information from March. Only the lenders you apply with for credit after March will do a credit report. And again, we dont know how diferent banks are going to use this information. I personally dont think there will be any noticeable change for at least 12 months, and then the changes will be very minor, at the fringes of lending.

Itl affect low doc and subprime borrowers the most, but the effect wont be nearly the magnitude of the GFC and aftermath.

 

[Peter_Tersteeg]

PT, no, I am not suggesting that it's okay not to disclose properties and debts by other lenders. The scenario I described could be one where you have acquired the 10 properties with different lenders after the initial 2 with the original bank.

Fair enough, but this really isn't that different from what currently occurs. Any application for credit already hits your credit file so if a lender gets a credit report they'll see everything you've been doing.

The main difference is that the records will be more accurate. In about 20% of the applications we submit the lender comes back and asks about entries on the CRAA. Its rarely a problem as in most cases it was a pre-approval not taken or a credit card that's been forgotten. With more accurate information, lenders will be able to see if an enquiry actually proceeded.

Deliberate non disclosure does occur (quite a bit unfortunately). There's plenty of banks, brokers and borrowers who do this, some in a serial manner. Positive credit reporting will reduce this form or fraud and I have no problem with that at all.

There's no doubt that the little black marks for late bill payments are a pain, but lenders are in the business of lending money. Late payment of your gas bill is so prevalent that if lenders stopped lending because of a few late bills, they'd never give money to anyone! There might be a period of adjustment, but in the end I don't think it will be as bad as some are suggesting.

 

[Brady]

PT, no, I am not suggesting that it's okay not to disclose properties and debts by other lenders. The scenario I described could be one where you have acquired the 10 properties with different lenders after the initial 2 with the original bank.

Regardless, your credit file will reflect all mortgages, all credit liabilities you hold up to Mar 2014 even to the bank that you borrowed from for your first 2 properties. That is my point, ALL your liabilities will be laid bare for all to see when they ask Veda for your credit file come March. The banks have been preparing their IT systems all through last year to both provide this information and receive this information to/from Veda. With computerization so comprehensive and powerful, it won't take long before all information is synched.

MTR, hoping that your particular credit provider won't be providing information to Veda is like basing your hope on a wind and a prayer, no offense. It's better to assume the worst and assume that all your credit providers are providing information to Veda and work on a strategy from there.

That should be happening anyway?

Banks already ask for all this information.

I'm not a fan of the small bills and what not showing as late as I sometimes miss these just due to poor management (only happened once whilst house sitting a different address). But end of the day I should be making these payment before the due date, so going forward it wont be happening. So for me its not a problem.

 

[Beanie Girl]

Beanie Girl, that first bank is not going to have your credit report, and know about the other 8 properties until you give them permission to do a credit report, and you aren't going to do that unless or until you apply for credit, and when you apply for credit, you need to disclose your assets and liabilities, usually.

Tobe, I certainly hope that banks/lenders have to seek permission from me first before they get my credit file/report from Veda, usually in relation to a credit application. I hope that there is a code or some law that will govern this.

But I'll just ask a rhetorical question,
If banks/lenders didn't ask for my permission before they gave financial information about me to Veda, why do they need to seek my permission to get financial information about me from Veda?

 

[tobe]

Tobe, I certainly hope that banks/lenders have to seek permission from me first before they get my credit file/report from Veda, usually in relation to a credit application. I hope that there is a code or some law that will govern this.

But I'll just ask a rhetorical question,
If banks/lenders didn't ask for my permission before they gave financial information about me to Veda, why do they need to seek my permission to get financial information about me from Veda?

thats the way the privacy laws are written. Banks (and anyone else for that matter, apart from ASIO etc) cant look into your private business without your permission.

 

[Gremlin]

Tobe, I certainly hope that banks/lenders have to seek permission from me first before they get my credit file/report from Veda, usually in relation to a credit application. I hope that there is a code or some law that will govern this.

But I'll just ask a rhetorical question,
If banks/lenders didn't ask for my permission before they gave financial information about me to Veda, why do they need to seek my permission to get financial information about me from Veda?

You almost certainly give them that permission to do so when you sign up to take their money for a loan or apply for the loan. Whether you bothered to read what you've signed away is a different thing.

 

[Brady]

Privacy forms allowing them to share information would need to be signed, they already do. Again nothing really new here.

 

[luckyone]

How long is your late bill going to be on your credit file for? Is it 5 years, 10 years, indefinite? Can't find that information anywhere.

 

[Kinnon Bell]

How long is your late bill going to be on your credit file for? Is it 5 years, 10 years, indefinite? Can't find that information anywhere.

I remember reading somewhere it was 2 years as I was thinking the same thing myself. I'll see if I can find the link.

"How far back will my RHI go?

Information about any particular payment cannot be held for more than two years from the date it was due."

 

[BayView]

The most valuable customer to a bank is the customer that pays their minimum payment on time, but never anything more. These are the people who get offers of credit card increases.

We are currently the poor sorry @rses paying the minimum and a bit above that when possible, and try to never use the card at all.

But for most of the time have been the financially whiz-bang dudes who paid the whole card on time each month.

And a bit of in-between at times.

The offers to increase have been coming through all our various stages of use.

 

[underdev]

Interesting that these changes seem to have the support from the mortgage brokers!

Wouldn't such a centralisation of credit information allow for the phasing out of the industry?

Why would the banks pay a commission for brokers to collect the information that they will now have.

 

[roe]

How long is your late bill going to be on your credit file for? Is it 5 years, 10 years, indefinite? Can't find that information anywhere.

http://www.veda.com.au/yourcreditan...how-long-does-information-stay-my-credit-file

Disc: I have shares in Veda

 

[Brady]

We are currently the poor sorry @rses paying the minimum and a bit above that when possible, and try to never use the card at all.

But for most of the time have been the financially whiz-bang dudes who paid the whole card on time each month.

And a bit of in-between at times.

The offers to increase have been coming through all our various stages of use.

I would suggest it's not quiet what Pete is saying.

And more so in your situation...

You have been paying the cards back be it minimum all full balance you're paying it on time, likely not late. Banks like that.

 

[Beanie Girl]

I've been poking around for information on, 'under what circumstances' can Credit Reporting Body (CRB) like Veda provide Credit reports to Credit Providers (CP) e.g banks/lenders

'Fascinating stuff', nearly went blind tonight reading new Privacy legislation regarding Credit reporting.

A new Credit Reporting (CR) code will come into effect on 12 March 2014 (old code repealed). The new CR code must be read in conjunction with New Privacy legislation also coming into effect 12 March 2014.

The parts highlighted in bold seem vague and does not explicitly state that the individual must consent, in writing, to the disclosure of the Credit Report information to the provider, unlike item 2 and item 3.

Item 5 seems extremely vague and open to interpretation.

My interpretation of Item 5 is that as long as CP has provided credit to you and CP believes that the CRB contains consumer credit liability information that relates to their credit provision to you, CRB is permitted to make disclosure on your Credit Report to Credit provider. It follows then that the CP can be making a request to CRB for your credit report without your permission as there is no proviso in Item 5 that your consent needs to be sought.

Thoughts?

New Part IIIA of the Privacy Act

20F Permitted CRB disclosures in relation to individuals

(1) A disclosure by a credit reporting body of credit reporting information about an individual is a permitted CRB disclosure in relation to the individual if:

(a) the disclosure is to an entity that is specified in an item of the table and that has an Australian link; and

(b) such conditions as are specified for the item are satisfied.

Permitted CRB disclosures

Item

If the disclosure is to ...
the condition or conditions are ...

1.a credit provider
the provider requests the information for a consumer credit related purpose of the provider in relation to the individual.

2. a credit provider
(a) the provider requests the information for a commercial credit related purpose of the provider in relation to a person; and

(b) the individual expressly consents to the disclosure of the information to the provider for that purpose.

3 a credit provider
(a) the provider requests the information for a credit guarantee purpose of the provider in relation to the individual; and

(b) the individual expressly consents, in writing, to the disclosure of the information to the provider for that purpose.

4 a credit provider
the credit reporting body is satisfied that the provider, or another credit provider, believes on reasonable grounds that the individual has committed a serious credit infringement.

5 a credit provider
(a) the credit reporting body holds consumer credit liability information that relates to consumer credit provided by the provider to the individual; and

(b) the consumer credit has not been terminated, or has not otherwise ceased to be in force.

6 a credit provider under subsection 6J(1)
the provider requests the information for a securitisation related purpose of the provider in relation to the individual.

7 a mortgage insurer
the insurer requests the information for a mortgage insurance purpose of the insurer in relation to the individual.

8 a trade insurer
(a) the insurer requests the information for a trade insurance purpose of the insurer in relation to the individual; and

(b) the individual expressly consents, in writing, to the disclosure of the information to the insurer for that purpose.



(2) The consent of the individual under paragraph (b) of item 2 of the table in subsection (1) must be given in writing unless:

(a) the credit provider referred to in that item requests the information for the purpose of assessing an application for commercial credit made by a person to the provider; and

(b) the application has not been made in writing.