Positive Credit Reporting widespread in New Zealand lending
With positive credit reporting increasingly being talked about, MoneyHub investigated which banks were reporting their customers’ positive and negative data to credit agencies. While negative instances of defaults on debt, late payments, uncollected payments and bankruptcies have always been reported to credit agencies, the arrival of positive credit reporting benefits customers who make on-time payments, early repayments and overpayments.
Senior Researcher Christopher Walsh
comments:
“Recently, more and more
of New Zealand’s banks have been engaging in ‘positive
reporting’, also known as ‘comprehensive credit
reporting’. This rewards those who are conscientious in
their repayments by reporting their behaviour to credit
agencies, ultimately giving lenders a better picture of a
borrower’s behaviour”.
“As is
the case with every application for a credit card, mortgage
or other types of loan, customer credit data comes from
information supplied by lenders and other companies all over
New Zealand – being late on a bill can be added to your
credit file, making it harder when it comes to applying for
more credit down the line”.
“We
wanted to know what banks do with your data. Specifically,
how much data are they sharing, who do they share it with,
and how this affects ordinary New
Zealanders.”
“We approached every
major bank and asked them to disclose their credit
assessment partners and whether they engage in positive
reporting for credit card, personal loan and mortgage
applications and subsequent
behaviour”.
“The responses
suggested larger banks all undertook positive credit
reporting (or planned to introduce it during 2018), whereas
the smaller banks such as SBS, TSB and the Co-operative bank
did not. This means that customers of the smaller banks with
loans or credit cards could have relatively less credit
history than those banking with providers who undertake
positive credit reporting”.
“While we noted that Equifax
dominates as the preferred agency for credit data overall,
some banks confirmed they source credit data from multiple
agencies when considering a customer’s application for
credit”.
“We wanted to make it
easy for every New Zealander to check their credit score and
history, and our guide to credit scores and credit checks
does this. Busting myths and misconceptions around credit
scores builds financial confidence and hopefully encourages
improved money management”.
Lenders and Data: What Your Bank
Knows About You...and Who Else Gets to Know
It
Bank Positive Agency Credit
Agency Credit
Data Requested from
Reporting? Data Sent
to
ANZ Yes Equifax
Equifax
ASB Yes Multiple* Multiple*
BNZ Due
in 2018** Equifax Equifax
Co-Operative Bank No Won't
Disclose Equifax
Heartland
Bank Yes Multiple* Multiple*
Kiwibank Yes Equifax Equifax
SBS No Equifax
Equifax
TSB No Won't
Disclose Won't
Disclose
Westpac Yes Equifax Equifax
Notes:
* The
ASB and Heartland Bank both stated it uses multiple credit
agencies when supplying and requesting customer
information
** The BNZ stated while it doesn't currently
undertake positive reporting, it confirmed it would be
introducing it in 2018
MoneyHub would continue to update its credit scoring and reporting guide on a regular basis and as developments came to light.
More: Credit Reporting
ends