AUSTRALIA SHOCKING 2 MILLION AUSTRALIAN FACING CREDIT DEFAULT MEANS CAN BE DENIED LOANS AND UNDERSTAND IN FIGURES(1)13% OUT OF 16 MILLION AVAILING CREDIT(2)WORST DEFAULTERS FROM QUEENSLAND FOLLOWED BY VICTORIA NSW AND ACT(3)MAXIMUM BETWEEN AGE OF 30-40 YEARS(4)DUE TO NEW CREDIT SYSTEM AS DEFAULT IS NOW RECORDED AFTER 14 DAYS INSTEAD OF 60 YEARS EARLIER 4TH OCTOBER 2014 Are YOU at risk of credit default? Two million Australians in danger of recording a poor credit rating – with Queenslanders and men the worst offenders 13% of all Australians are at risk of defaulting on credit Highest at risk citizens are in Queensland, with 16% at risk Australians in their 30s and 40s are in the highest risk bracket Under new credit scheme defaults are recorded after 14 days instead of 60 Millions of Australians could be at risk of credit default, as changes in credit reporting regimes tighten the reigns on payment records. New reports reveal that 13% of the estimated 16 million Australians who use credit are at risk, with nearly 600,000 being considered facing high risk of defaulting. This means that nearly two million Australians could be refused credit applications unless immediate action is taken to improve their financial records. Analysis conducted by credit agency Veda indicates that 16% of Queensland residents are at risk of defaulting within the next year. In Victoria and NSW, the likelihood is 13%, and in the ACT 10% are at risk. The figures also show that Australians in their 30s and 40s are in the highest risk bracket, as they tend to have young families and may be facing higher levels of financial stress. They need to make sure they pay the minimum balance on their credit card, pay their utility bills including electricity, gas and phone bills on time and make sure they keep track of the credit commitments,’ Veda spokewoman Belinda Diprose told The Herald Sun. For people who are struggling they should talk to their credit provider and don’t suffer in silence. There’s often hardship requirements that a credit provider can activate and it can help consumers ride themselves out of what potentially could result in a default on their credit file.’ The new credit reporting scheme was lobbied for by many credit agencies within Australia and was launched in March. Under the scheme, a comprehensive payment history will be recorded and will mean that a credit default will occur sooner. Missed payments will be recorded, resulting in a default, after 14 days, rather than the previous allowance of up to 60 days Comprehensive reporting has been utilised within the United States for many years, and uses a credit score, among other factors, to determine whether to approve a loan. Within Australia, this credit score comes under the VedaScore system, which is a number up to 1200 that encompasses an individuals credit record. On average, the national credit score is 760, with a score of 200 or less meaning that a person has a 50% chance of experiencing an adverse credit event within the next year. Once an individual is listed as having defaulted, they will be listed on the BayCorp, the national default register, for 5-7 years. The new scheme may provide some benefits to Australians, as it collects more information and will allow people with poor credit ratings to prove they have improved their financial behaviour. As the information collected will include detailed repayment history on credit reports, it will make applying for mortages and loans simpler. In June this year, lender SocietyOne announced that it would be using risk-based pricing for determining the outcome of loan applications. Under this scheme, borrowers with the highest credit ratings will receive lower interest rates in contrast to those with lower credit ratings.
Posted on: Sun, 05 Oct 2014 03:40:18 +0000
Trending Topics
Recently Viewed Topics
© 2015