What is a Positive Credit Report?
Almost everybody in New Zealand has a credit report and this credit report is used to conduct a credit check on an individual who has applied for credit to determine how risky it will be to lend to that individual. A credit check is carried out not only by banks and loan providers but by some power companies, landlords, insurance companies etc.
How it used to work
Previously New Zealand used what is called a “negative” credit reporting system. Using this system the only credit records kept were a list of credit applications and information on any negative events such as defaults on loans, failure to pay bills like power on time. Using this report lenders were able to see how much a person applied for but could not see whether it was approved or how much was approved.
What is changing
From April 2012, the credit reporting system was changed to a comprehensive credit reporting system also referred to as a “positive” credit reporting system. The new system would allow more information to be captured including how much was borrowed and whether an individual is keeping up with his/her payments regularly (such as hire purchase, credit cards, power bills, mortgage repayments, rent etc). Using this system, missed and late payments will have the potential to affect a person’s credit report. Making regular repayments on time on all repayments from power, phone, rent to credit cards, mortgages become important in maintaining a good credit report.
What it means for Lenders
This system also means that lenders will have a better picture of the financial position of potential borrowers. For example, using the previous system, when a customer applies for a credit card the lender will not know how many credit cards the borrower has if you have not defaulted before. With the new system the lender will know how many you have, the limits and what repayments you make.
How to access your report
Everyone can access their credit report for free and are advised to do so before applying for credit. You can dispute any data if it happens to be wrong. The three credit report providers are :