Proposed Privacy Act Changes to Affect Borrowers

The proposed changes to the Privacy Act would allow banks to investigate the type of each current credit account; the date each current credit account was opened; the credit limit of each open account; the date on which each credit account was closed; and credit repayment history.

Access to your credit bureau file will remain limited by the law, with lenders only accessing with permission at the time of a credit application. The greatest fears surrounding this proposed change is that by allowing lenders increased investigative powers into borrower’s credit history  this will cause greater financial exclusion.

In a credit market that has seen severe tightening of credit policies to the point where many borrowers who once had easy access to credit are now being scrutinized over minute details, the proposed change will again exclude even more borrowers from lending.

Now more than ever it’s important that you keep your financial records clean. Ensure sufficient funds in your accounts for direct debits and cheques. Watch your credit defaults. At the time of weighing up the worth of fighting a telecommunication company or the like, consider the cost of the long term effect if you end up with a default.

If you know that you are looking to take advantage of the rising property market, get your finances in order. Don’t wait for the lenders to put on the breaks even further before you take action.