What is a credit report?
Your credit report (also known as a credit record) is a copy of the borrowing and payment history information contained in your credit file. It includes details such as how much credit was offered and by whom, and whether you paid your obligations on time, along with any defaults that have been lodged.
New Zealand has three consumer credit reporting agencies – Centrix, Illion, and Equifax, who work with lenders and other data providers to pull together information. It is important to note that not all businesses or lenders provide data to all three reporting agencies, so they may all hold different information.
How we share your data is bound by the laws set out in the Credit Reporting Privacy Code.
What information is in the credit report that MTF Finance uses?
Lending money to a person always has a component of financial risk– a ‘perfect customer’ is typically rated as low risk. The credit file assists us by giving an overview of your credit history by detailing:
- A credit score - summarises your credit report into a single number. The higher the number, generally speaking, the easier you'll find it to borrow and the lower the interest rate.
- Identity verification – your full name (including any variations that have been entered by other credit providers), gender, date of birth, last known address and other previous addresses recorded in the past five years. This information on the report is not used to calculate any kind of risk.
- 24 months of payment history for any current obligations that also use Comprehensive Credit Reporting (see below). This gives us a quick picture of your account behaviour.
- Activity (credit enquiries) - this shows any business or individual who has interacted with your credit file, the reason they have done so and what it was for (mortgage, credit card or store account, hire purchase, etc).
- Things the lender should know – the negative stuff. Any defaults, District Court judgements, or insolvencies recorded against you.
- If you are registered as a property owner, and any affiliations with companies recorded on the New Zealand Companies Office register.
The good news is that MTF Finance has now switched to the Comprehensive Credit Report (CCR) system provided by Centrix, which allows us to provide a better service to our current and potential customers.
What’s the difference from the old system?
The new Comprehensive Credit Reporting recognises that positive information is far more predictive of risk than the negative, and gives a much fairer and balanced overview of someone’s credit history.
The previous system relied solely on negative reporting, meaning that a consumer’s credit report only contained enquiries (a record of every time your credit file was accessed by a provider) and defaults (when a borrower has failed to repay their debts as agreed).
CCR includes companies that you have borrowed money from and other credit providers such as household utilities. If you’re paying your power and internet bills on time, for example, this can contribute to the overall positive picture of your repayment habits.
We now have access to repayment history information and can identify good consumer credit behaviour to help make better-informed lending decisions. As a provider of CCR, we report repayment history of our customers back to Centrix in exchange for accessing the positive data. Any other agency that also contributes to CCR will be able to see how well you are maintaining your loans with us.
Why is CCR better for me?
- You can now demonstrate a good repayment record.
- You can recover from bad credit. This is great news for borrowers who may have had a rough patch in the past.
- You can establish a credit profile, as the payment history of utilities is recorded as well as loan obligations. This is great for young people and those who are new to the country. Before CCR, a lack of data here indicated high financial risk.
- CCR allows lenders to record quotes for goods or services that they’ve offered you. If you are just shopping around, the CCR report will show no credit was actually given in that instance. This is important because under the old system lots of credit enquiries generated in a short time frame would look like you were taking on a lot of debt (even if you hadn’t actually borrowed any money). Your initial enquiry will be lodged as ‘quotation only’. It converts to a ‘finance application’ on your credit file only once the loan has been completed and signed.
- With previous systems, the only information displayed was the credit enquiries and defaults (the bad stuff). Now, lenders have the opportunity to approve credit that may otherwise have been declined. Now, one payment default does not necessarily mean that someone can’t get credit anymore if they can demonstrate that their overall repayment history is positive. The better overview allows lenders to see the obligations that a customer actually has, which gives them better information to support borrowers in meeting all of their obligations.
Can I see my credit report?
Absolutely, and free of charge! You can request a copy of your credit file at any time through the reporting agencies, but as there are three such agencies in New Zealand, they may all hold different information. If you’re looking for a copy of your credit report, it’s a good idea to obtain one from all three agencies to cross-check they are all correct.
Request credit report from Centrix
Request credit report from illion
Request credit report from Equifax
What if my credit report is wrong?
You should contact the reporting agency directly to correct your details. MTF Finance representatives are unable to make enquiries on your behalf. If you note on your credit report that MTF Finance has provided the incorrect information, then please contact us in the second instance.
Want to know more?
The website of the privacy commissioner has a lot of in-depth information about credit reporting if you have any further questions.
Want to discuss your finance options?
You are protected by responsible lending laws. Because of these protections, the content of this page is not regulated financial advice.
This means that duties and requirements imposed on people who give financial advice do not apply to this content. This includes a duty to comply with a code of conduct and a requirement to be licensed.
