How changes to the privacy policy can damage your credit rating
Earlier this month the Federal Government introduced the most significant changes to privacy laws in over 25 years. If you’re currently borrowing money from a lender or planning to do so in the future, having a firm understanding of what these changes are and how they can affect you is vital to your financial future.
What has changed?
The changes give increased powers to The Office of the Australian Information Commissioner (OAIC). Lenders will now have access to more comprehensive information about your loan or credit card, your payment terms, and your payment history – including specific details about the day payment was due and the day it was paid. In short, lenders will have more access to information about your borrowing and repayment history.
What could this mean for your credit rating?
Maintaining a good credit rating may be more difficult because even if your payments are a few days overdue, future lenders could still place a black mark against your name. Previously lenders did not report payments until they went into arrears or default and now all payments - whether on time or not - will be openly known.
What should I do?
There’s no need to panic, but it is important to be alert and place yourself in the best possible position to ensure you don’t end up with a bad credit rating. You can do this by:
- Keeping check of your credit report: request your history from your lender, understand your lending criteria and correct any errors as soon as possible
- Choose a loan or credit card you can set and forget: arranging regular set amount direct debit payments will help to ensure your payments are never late
- Think about your credit card carefully: choose a loan or credit card option which you confidently know you’ll be able to pay off on time each month
- Remembering the 60 day rule: beware that payments made after 60 days will go into default, putting a black mark next to your name
If you need help getting your finances in order please contact us to book a FREE financial health check.
General advice disclaimer: This article has been prepared by FMD Financial and is intended to be a general overview of the subject matter. The information in this article is not intended to be comprehensive and should not be relied upon as such. In preparing this article we have not taken into account the individual objectives or circumstances of any person. Legal, financial and other professional advice should be sought prior to applying the information contained on this article to particular circumstances. FMD Financial, its officers and employees will not be liable for any loss or damage sustained by any person acting in reliance on the information contained on this article. FMD Group Pty Ltd ABN 99 103 115 591 trading as FMD Financial is a Corporate Authorised Representative of FMD Advisory Services Pty Ltd AFSL 232977. The FMD advisers are Authorised Representatives of FMD Advisory Services Pty Ltd AFSL 232977. Rev Invest Pty Ltd is a Corporate Authorised Representative of FMD Advisory Services Pty Ltd AFSL 232977.