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Credit reports

How credit reporting works

Privacy Act 2020, s 22, Principles 6-8 Credit Reporting Privacy Code 2020, clause 5, rules 6-11

Credit reporting agencies gather and sell information about individual peoples’ credit histories. The information they can report on includes:

  • your current credit accounts, such as hire-purchase arrangements and loans (including credit limits and your repayment history)
  • whether you’ve ever failed to make (“defaulted on”) your repayments
  • any court judgments given against you for debts
  • whether you’ve ever been declared bankrupt
  • your payment history for phone, electricity and gas accounts
  • if you have any outstanding fines or reparation.

What is a credit score?

Credit Reporting Privacy Code 2020, clause 4

You are given a credit score – this is a number between 0 – 1,000 (the higher the number, the better your rating). This indicates how credit worthy you are and how likely you are to pay back the loan on time. A history of paying your bills on time will give you a higher score. Your score isn’t fixed – it can change over time as “old” information drops off your credit file, for example a default from ten years ago won’t affect your score anymore.

If you have never applied for any credit you won’t have any credit history, which means the lender has no information about you or the likelihood you can make your repayments. This might lead them to turn you down.

What things negatively affect my credit rating?

Your credit rating might be reduced if you:

  • miss payments (“default”) on loans and even on smaller bills like power and phone
  • shift debt from one account to another (like from one credit card to another card),
  • apply for too much credit or for too many payday loans,
  • have debt collectors involved or if you’re going through an insolvency procedure (such as bankruptcy or the no asset procedure)
  • have made a hardship application to your bank or other lender.

How can I improve my credit rating?

You can improve your credit rating by paying your bills on time, paying your credit card off in full each month cancelling unused credit cards, limiting credit applications and payday loans.

Be wary of sharing bills with other people like flatmates as their failure to pay bills can affect your rating.

Who can see my credit information (“do a credit check”)?

Credit Reporting Privacy Code 2020, Schedule 5

People who will want this information may include lenders, prospective landlords, employers and insurers, but they can’t get it without your consent. However, credit reporting agencies generally don’t need your consent to provide credit reports to debt collectors, people involved in court proceedings against you, and certain government agencies (for example intelligence agencies preparing a security clearance).

Credit reporting agencies must take reasonable steps to make sure the information they hold about you is accurate, up-to-date, complete, relevant, and not misleading.

How long does information stay on my credit file?

Credit Reporting Privacy Code 2020, Schedule 1

Different information can stay on your credit report for different periods of time, varying from 6 months to indefinitely. For example:

  • Credit application and payment default information stays on file for five years.
  • If you were made bankrupt or subject to a no asset procedure, this information can be on your file for up to four years from the date you were discharged. However, if you are made bankrupt or enter a no asset procedure multiple times, this will stay on your credit report indefinitely. For more information about bankruptcy and no asset procedures, see: “When you can’t pay your debts: Bankruptcy and other options”.

How can I get a copy of my own credit record?

Privacy Act 2020, s 22, Principle 6, s 1 Credit Reporting Privacy Code 2020, cl 5, rule 6(1)(b), cl 6(2)(b)

You have the right to ask for a copy of your credit report. If any of the information isn’t correct, you can apply in writing to the credit reporting companies for it to be corrected.

Three credit reporting companies (Centrix, Equifax and Illion) operate in New Zealand. To check your record, or to correct any information, you’ll need to contact them all (see: “Where to go for more support” at the bottom of this page).

A credit reporting company must give you a copy of your report within 20 working days after you ask for it. They can’t charge you for this unless you ask for them to provide it within five working days, in which case they can charge you up to $10 (including GST).

What if there’s a mistake on my credit record?

Credit Reporting Privacy Code 2020, clause 5, rule 7

If you believe there’s a mistake on your credit report you can contact the credit reporter to ask for it to be corrected. The credit reporter will make a decision to either correct the mistake, or tell you why they aren’t willing to change the mistake within 20 working days.

Even if they refuse to change the mistake, they have to make a note on your credit report that you requested the change. If they refuse and you disagree with that decision, you can complain to the Privacy Commission (see: “Complaining to the Privacy Commissioner”).

Does checking my own credit record affect my rating?

No, checking your own credit score will not lower you rating.

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Credit and debt

Where to go for more support

Legal information and support groups

Community Law

Your local Community Law Centre can provide you with free initial legal advice.

Find your local Community Law Centre online: www.communitylaw.org.nz/our-law-centres

Consumer Protection

The Consumer Protection website has useful information on a range of consumer topics. Consumer Protection is part of the Ministry of Business, Innovation, and Employment (MBIE).

Website: www.consumerprotection.govt.nz
Email: cpinfo@mbie.govt.nz
Phone: 0508 426 678 (0508 4 CONSUMER)

Consumer NZ

The Consumer NZ website provides a wide range of information on consumer issues and template letters you can use to write to traders to enforce your rights.

Website: www.consumer.org.nz
Email: info@consumer.org.nz
Phone: 0800 226 786 (0800 CONSUMER)

Commerce Commission

The Commerce Commission enforces the laws against misleading and deceptive conduct by traders (the Fair Trading Act) and the consumer credit legislation (the Credit Contracts and Consumer Finance Act). The Commission provides information on these areas on its website.

Website: www.comcom.govt.nz
Email: contact@comcom.govt.nz
Phone: 0800 943 600

To make a complaint online: comcom.govt.nz/make-a-complaint

To read consumer rights in different languages: comcom.govt.nz/consumers/read-about-your-consumer-rights-and-business-responsibilities-in-another-language

Citizens Advice Bureau (CAB)

CAB provides free, confidential and independent information and advice. See CAB’s website for valuable information on a range of topics.

Website: www.cab.org.nz
Phone: 0800 367 222
Facebook: www.facebook.com/citizensadvicenz

Find your local CAB office: www.cab.org.nz/find-a-cab

FinCap and Money Talks

FinCap is a non-government organisation providing free financial mentoring services.

Website: www.fincap.org.nz
Email: kiaora@fincap.org.nz
Phone: 04 471 1420

MoneyTalks is a financial capability helpline operated by FinCap. The Financial Mentors offer free, confidential advice by phone, text, email and live chat.

Email: help@moneytalks.co.nz
Phone: 0800 345 123
Text: 4029
Live chat: www.moneytalks.co.nz

Insolvency and Trustee Service (ITS)

The ITS deals with bankruptcies, no-asset procedures, summary instalment orders and some company liquidations. Information about those processes is available on its website. The ITS is part of the Ministry of Business, Innovation and Employment (MBIE).

Website: www.insolvency.govt.nz
Phone: 0508 INSOLVENCY (0508 467 658)

Dispute Resolution Schemes

There are four dispute resolution schemes for consumers dealing with lenders and other credit providers. Contact the scheme your service provider has registered with.

1. Financial Services Complaints

Website: fscl.org.nz
Phone: 0800 347 257

2. Insurance & Financial Services Ombudsman

Website: www.ifso.nz
Phone: 0800 888 202

3. Banking Ombudsman

Website: www.bankomb.org.nz
Phone: 0800 805 950

4. Financial Dispute Resolution Service

Website: www.fdrs.org.nz
Phone: 0508 337 337

Credit Reporting

Your credit record

There are three credit reporting companies that operate nationally in New Zealand. To check your record or correct any information, you’ll need to contact them all.

You’re entitled to a free copy of your credit record. You should make sure you choose the free option when you contact each company.

1. Centrix – www.centrix.co.nz – 0800 236 874
2. Illion – www.illion.co.nz – 0800 733 707
3. Equifax – www.equifax.co.nz – 0800 698 332

Personal Properties Securities Register (PPSR)

Search the PPSR register to see if there is any security interest registered against a vehicle. This can be done for a small fee by registering to check online.

Website: www.ppsr.companiesoffice.govt.nz

Privacy Commissioner

The Privacy Commissioner has information on your rights in relation to credit reporting and how to complain if you feel your rights have been breached.

Website: www.privacy.org.nz
Email: enquiries@privacy.org.nz
Phone: 0800 803 909

To make a complaint online: go to the website above and select “Your rights tab” then “Complaining to the Privacy Commissioner”

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