Why a late loan repayment could cost you

July 25, 2013
Justine Bennett

There have been changes made to the Privacy Act that you should be aware of in case you are ever late with a loan repayment.  Please check out the following article from API Magazine, and if you are ever going to be late with a repayment, please make sure you make arrangements with your lender whenever possible. 

Have you been late on a loan repayment?

It may cost you. Australians need to be vigilant about their repayment history now more than ever. The government has recently made changes to the Privacy Act 1988 to allow credit-reporting agencies to collect new kinds of information.These changes allow lenders to give your repayment history information (RHI) to credit agencies to note on your personal file.

Previously, the Privacy Act only allowed reporting if you’d defaulted on your loan repayment. A default occurs when a payment is at least 60 days overdue and the lender has taken action to recover the money. As of December 2014, credit providers will be able to record a missed or partial payment dating back to December 2012. This information will be available to all credit providers and determine your eligibility to be provided with credit.

RHI is information about whether you’ve met your consumer credit payment obligations. Consumer credit is intended primarily for personal, family or household purposes. This includes a loan to refinance, purchase, renovate or improve a residential investment property.

The new changes allow credit-reporting agencies to record positive and negative information about your RHI. The following can be recorded on your file:

  • The day on which a payment is due.
  • Whether you made a payment after the due day.
  • The date on which the payment was made.
  • Whether you missed a payment. 
  • A missed payment includes missing a payment in full or making a part payment.

This means if you’ve failed to make the full amount of a payment on time from December 2012, it may affect your ability to obtain credit in the future.When do these new changes take effect?

From March 2014, credit reporting bodies can disclose your RHI, along with other credit-related personal information to licensed credit providers.

How long does RHI remain on my credit file?

It’ll stay on your credit file for two years from the day on which a payment was due and payable.

If you’ve only paid part of the amount owing, it’s viewed as a missed payment. The reporting doesn’t include the amount of any missed payment – only the fact that you’ve missed a payment.

How do I know if a credit provider has passed on my RHI to a credit reporting body?

A credit provider must notify you before they start collecting your personal information, including RHI. When a credit provider collects your RHI it should notify you of certain matters, including the name and contact details of any credit reporting body to which they’re likely to disclose information.

You should ask for the privacy policy of any credit provider and it should contain this information.

If you believe a credit provider or reporting body holds RHI about you, you can make a request to access it. In most cases, they must comply with your request and will do so for free.

What can I do if I believe my RHI has been handled inappropriately?

If you suspect any information held is incorrect, you should notify the credit provider or reporting body and ask them to correct it. If you think it has been handled inappropriately you can lodge a complaint.

If you aren’t satisfied with the response to your complaint, you can escalate the matter to an external dispute resolution scheme or to the Australian Information Commissioner.

For further information contact:

Office of Australian Information Commissioner
Website: www.oaic.gov.au 
Telephone: 1300 363 992

Veda Advantage
Website: www.mycreditfile.com.au 
Telephone: 1300 850 211

Dun & Bradstreet
Website: www.dnbcreditreport.com.au 
Telephone: 1300 734 806 

Source: http://www.apimagazine.com.au/api-online/newsletter/13/july-newsletter-2/why-a-late-loan-repayment-could-cost-you

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