Veda Advantage seeks 2 year payment history

For Immediate Release

Veda Advantage seeks 2 year payment history as part of more comprehensive credit reporting, in line with rest of OECD

24 months provides fair rehabilitation mechanism

AUCKLAND, 17 February 2009 - Veda Advantage, New Zealand’s largest credit information provider, has called for a 24 month payment history to be an integral component of a more comprehensive reporting regime for the country’s credit information. The proposed guideline is included in a number of recommendations released today by Veda Advantage in its submission to the Credit Reporting Privacy Code Reference Group, set up by the Office of the Privacy Commissioner.

Veda Advantage Country Director, John Roberts, says “We believe in rehabilitation, not persecution. If someone has maintained an excellent credit history long after a default, then a perfect track record over the preceding 24 months shows a strong indication to rehabilitation. But the purely negative credit reporting structure that exists today does not allow for redemption, which we think is unfair to both borrowers and lenders.

“More information leads to fairer pricing of risk. Consumers end up getting the rate they deserve, and they no longer subsidise those who are bad risks or whose history has been masked by the limits of negative reporting. Credit markets run on risk and, with comprehensive reporting, risk becomes far more transparent.

“With Australia considering a two year payment history as part of its move towards more comprehensive reporting, New Zealand will become one of only two OECD countries that provides exclusively negative credit information,” Mr Roberts concluded.

Summary of Veda Advantage recommendations
Veda Advantage recommends at least six additional fields of information be required as part of a more comprehensive reporting regime:
1. the type of each credit account opened (for example, mortgage, personal loan, credit card)
2. the date on which each credit account was opened
3. the current limit of each open credit account
4. the date on which each credit account was closed
5. whether, over the prior two years, the individual was meeting his or her repayment obligations at each point of the relevant repayment cycle for a credit account; and, if not,
6. the number of repayment cycles the individual was in arrears.

ENDS

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