Balanced credit reporting will benefit consumers and lenders

The Financial Services Federation strongly supports the proposed changes to the Credit Reporting Privacy Code, announced yesterday by the Office of the Privacy Commissioner (OPC).

“Proposed changes to the Code to enable positive credit reporting will bring New Zealand into line with other jurisdictions and we have long advocated for the benefits it would deliver for both consumers and lenders,“ said Kirk Hope, Executive Director of the Financial Services Federation.

The ability to balance the current default-only reporting with positive credit information, such as a good record of paying bills, will provide more accurate credit scoring. This clearly benefits people that might have historical defaults (currently scored) but positive payment behaviour since the default (not currently scored), and puts lenders in a much better position to assess a client’s ability to repay a loan.

Along with the proposal to amend the Code to allow for positive reporting, the proposed amendment to allow credit organisations to store drivers’ license numbers provided by consumers when they take out credit also reduces the risk of identity fraud.

“Additional safeguards that the OPC has added to the Code also gives people comfort that all the additional information – positive credit behaviour and driver’s license identifiers – will be protected and stored securely,” said Mr. Hope.

ENDS

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