Millions of Aussies at risk of credit default

by Julia Corderoy01 Oct 2014
New data reveals that 13% of Australians are at risk of a credit default in the next year, which could impact on their capacity to get a loan.

Credit reporting agency, Veda ranked the credit scores of one million Australians from zero to 1,200 and found that the national average was “very good” at 760. Although, the credit agency also found that two million Australians are at risk. Financial strain and laziness in paying bills were the two main reasons for dodgy credit scores.

Veda spokeswoman Belinda Diprose said that she would encourage more Aussies to check their credit history and take steps to improve their score before it’s too late.

“It is important that people know they will be able to seek out a greater range of credit offers based on their credit worthiness, with some lenders already preparing to offer this opportunity based on VedaScores. The extra information will enable credit providers to assess risk levels more accurately, which we have seen benefit consumers overseas. Consumers who know they have a poor VedaScore can gain insights to improve their credit rating and become more attractive to credit providers,” she said.

Independent consumer advocate Christopher Zinn told News Ltd that a bad credit rating could follow anyone around, so it is important that everyone takes this seriously. 

“The score is nothing to do with your income so you could be a millionaire who is actually very lazy or poorly organised about paying bills or the mortgage on time and you could have bad marks on your credit report. The people at the bottom are not necessarily living hand to mouth, it’s more your history and ability to build up your repayment history to service debt.”

 

COMMENTS

  • by John C 1/10/2014 9:56:43 AM

    Yes what about where there is an innocent oversight and the alleged debt is paid yet the infringement remains on the credit file for five years. This oversight does not reflect in anyway the creditworthiness of the victim in respect of their other arrangements yet they are punished for this one error. This is where the system is wrong. Only a Court of Law has the right to dish out a punishment, not the Credit Reporting Agency or their subscriber who publishes it! No one should have this power to destroy peoples financial lives for five years over a $150 oversight! This onerous convict mentality legislation needs to be changed. This is not positive credit reporting. This is bastardy!

  • by Old Broker 1/10/2014 10:59:44 AM

    In the UK if you pay your council rates late or even your TV tax you are listed on the credit file. Also any utility bill that is paid late can also be roped into the web. Veda needs to increase its fees and this is another way that they will get members to take out more access and peep into borrowers lives. Where is the privacy commission on all of this and also why does 1 company have so much access and control surely this is anti competitive?

  • by Country Broker 1/10/2014 11:34:11 AM

    Is this an effort by VEDA to raise revenue by charging people to access their file .

    The government were very lax in allowing a change in the reporting , for me any utility bill that is under 1,000 or Telco that is under 1500 can NEVER be reported , I have seen many instances where the companies actually threaten to ;place a default on file " ,. The whole system Is BROKEN and needs the Federal Minister for consumer affairs to intervene and fix it , To say 2,000,000 plus people could be effected is a red flag for the federal government. The MFAA and FBAA also need to look after their members interests and lobby hard for reform in the credit reporting industry. Veda and Dunn and Bradstreet have too much power , and it could tell in the long run when credit approval slow down.