If your account falls into arrears with a credit provider, that fact is recordable by credit agencies and remains on record for five years, in accordance with government and social policy.
New reforms to the Privacy Act means that new kinds of credit related personal information can be collected about individuals. We can conceive that given how Australians typically use credit cards, this reform may lead to future insolvencies.
From March 2014 credit reporting agencies can disclose your ‘repayment history information’, which includes history captured from December 2012. It relates to any ‘consumer credit payments’ you make, or fail to make, to a licensed credit provider including:
- The due date
- Payment status of each due payment (partial payment deemed missed payments)
- The dates you made missed payments (but not the amounts)
This means that failing to make a payment by the due date now can affect your ability to get credit from March 2014.
Of course how this information is used is a discretionary matter and built into the reforms is a requirement that the information disclosed must be communicated to the individual concerned.
It has been reported in many media spaces in recent times that credit card debt has been a contributor to insurmountable debt, particularly with young adults. For those who always pay the minimum and use credit cards within their business operations, it may be that they can no longer rely on the once easy pastime of gaining more credit.
We will continue to watch this space.
For more information go to: Office of the Australian Information Commissioner