Veda credit scores: mystery still surrounds calculation.

2 October 2013

The decision by Veda Advantage to offer credit scores to Australian consumers previously reserved for lenders has been welcomed by a consumer advocate for accurate credit reporting – as long as Veda  clearly outlines how the score is calculated.

CEO of MyCRA Credit Rating Repair, Graham Doessel says in general consumers have been kept in the dark about how to best actively manage their credit worthiness.

“I believe every credit active individual has the right to know what their credit score is, but with that, they also need to know how that score is arrived at to positively manage their own credit decisions,” Mr Doessel says.

He says people believe if they pay all of their bills on time, their credit score will be high, but this is not always the case.

“There are a range of factors that go into the score calculation – and it has all been a bit of a mystery to consumers really which is not ideal,” he says.

Mr Doessel says largely consumers don’t even know they have a credit score.

“Most times it’s only when their credit score is lower than it should be to obtain finance with a lender that consumers even know they have been rated with a number attached to their approvability,” he says.

Veda Advantage’s Marketing Manager Belinda Diprose told Banking Day yesterday there was a low level of consumer awareness about credit reporting, with as much as eighty per cent of people having never checked their credit report.[i]

Mr Doessel says currently the big issue with allocating a credit score under the current credit reporting system, is that the number is only calculated on negative data.

“It’s not balanced. An individual can have a few too many credit enquiries in a certain period, and perhaps apply for the ‘wrong’ type of credit, which will reduce their rating, and there is no consideration for paying bills on time to offset that information,” he says.

New Privacy laws to take effect March 2014 will provide extra information for lenders and Mr Doessel says this will deliver a bigger picture of credit suitability and more information from which credit reporting agencies can draw on to calculate a fairer credit score.

“Until then, any number of things could be shaving points off your score – consumers don’t really know for sure the full gamut of what may reduce it, and this needs to be made public knowledge now that the score is available and moving forward towards comprehensive credit reporting in March.”

Go to http://bit.ly/My-Free-Credit-File for more information on obtaining your credit score.

/ENDS.

Please contact:

Graham Doessel – CEO Ph 3124 7133

Lisa Brewster – Media Relations media@mycra.com.au

Ph 07 3124 7133 www.mycra.com.au www.mycra.com.au/blog

MyCRA Credit Repair 246 Stafford Rd, STAFFORD Qld

MyCRA is Australia’s number one in credit rating repairs. We permanently remove defaults from credit files. CEO of MyCRA Graham Doessel is a frequent consumer spokesperson for credit reporting issues and is a founding member of the Credit Repair Industry Association of Australasia.