We’ve been talking about it for a while now, but the warnings have been coming thick and fast over recent weeks about the new data sets which may impact your credit rating. Fresh warnings have been issued over the important change to repayment history information, which will take effect from March next year.

We keep talking about this important issue for you and your credit file.

By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repair and www.fixmybadcredit.com.au

If you struggle to pay your bills on time, you might find it harder to get finance. But the other issue is – if you experience a mistake in reporting this information from your Creditor – then it is more important than ever to know about it before you apply for finance, so you can take steps to rectify it.

While defaults will still be recorded on your credit file (these are issued if your account is more than 60 days in arrears) licenced Credit Providers will also be able to issue late payment notations after payments are 5 days late – and that is being recorded now.

A recent story in the Newcastle Herald ‘Late payers are running out of time’, features thoughts on the new laws by Katherine Lane of Consumer Credit Legal Centre NSW, who says the changes will likely mean late payers will pay higher rates of interest on loans than people who pay on time, and warns it may not always be fair.

Lane says five days overdue is too short a period to put on people’s records.

”What if [the missed payment] is because of a bank error or the house is flooded or someone has stolen your mail?” she says.

”There needs to be a concept of fairness when it is not your fault.”

She says individuals could be punished if banks take a month to correct an error. ”Why should a missed payment that is not your fault reflect on your creditworthiness?” she says.

We recommend you ensure you are in the habit of making payments on time, but also that you make a habit to check your credit report regularly – especially after March 2014.

And how will late payments impact on lender’s credit decisions?

Dun & Bradstreet director of consumer risk solutions Steve Brown says it is unlikely a credit provider will rely entirely on a credit report to make a lending decision.

”Lenders are looking at a range of issues and one of them is whether someone has got the capacity to repay,” he says.

Brown says that under the new regime, credit providers would be able to much better assess the repayment capacity of those seeking credit. Someone might have defaulted three or four years previously after losing their job and credit providers would be able to see that payments were being made on time, Brown says.

Want to see what is written on your credit report? You can do this for free. Order your free credit report and make sure everything that’s recorded against your name is true and correct. If there’s anything on there you’re not sure about – give us a call and we can help.

Image: Kittikun Atsawintarangkul/ www.FreeDigitalPhotos.net