13 May How Lenders Share Your Data – The Basics of Comprehensive Credit Reporting
Outside of your own home, few people know more about your financial information than those who lend you money. Between the information that lenders collect when assessing applicants’ fitness for personal loans and the subsequent payment records, your lenders are handling information that will have a sizable influence on your financial future.
But what do lenders actually do with the information they’ve acquired from borrowers? Keeping that information secure is always the first priority, but lenders don’t just throw data in a vault and throw away the key. Your borrowing information is shared with the credit agencies that calculate your credit score. This practice is known as ‘credit reporting’ and it provides the basis for your future borrowing rates, and even your ability to secure a loan at all.
Credit reporting is not a static practice, and recent changes have made the news. Let’s look at what information your lenders share with which credit agencies.
What is comprehensive credit reporting?
In recent years, lenders have been trending toward a practice known as “comprehensive credit reporting”. Comprehensive credit reporting means that lenders share more than just negative information like missed payments, defaults, and bankruptcies. Lenders now provide positive information like timely loan repayments to reward good financial behaviour. Combining the positive and negative information is meant to provide a more “comprehensive” snapshot of a person’s financial competence. Credit agencies can see how much money you’ve borrowed and how well you’re managing your payments.
Where do lenders send your data?
Three credit agencies in New Zealand process credit scores. Equifax, Centrix, and Ilion collect borrowing information from lenders. This includes credit cards, mortgages, and personal loans. This information sharing is a two-way street, because the information provided by lenders to credit agencies become credit reports that credit agencies provide to lenders.
What can you do to protect your information?
Lenders are allowed report your financial information to credit agencies, and indeed, this is to your benefit, if you’re staying on top of your credit payments. However, protecting your own financial identity requires that you pay close attention to your information. Check your credit report regularly. This can be done for free once a year with each of the three credit agencies. Should you find any of the information contained in your credit report to be inaccurate, you can legally pursue a correction at no cost.
Also, if you believe that you a victim of identity fraud, or just at risk of it, you can ask credit reporters to freeze your information until the threat has been addressed. Suppressing your credit report will prevent new credit accounts from being opened in your name.
Work with a lender that keeps your data safe
Wherever you are looking for loans NZ wide, never work with a lender who doesn’t have a proven track of keeping their borrowers’ information safe and secure. At Max Loans, we value your privacy and seek to set you up with personal loans that work with your current financial circumstances, maximising your opportunity to turn your borrowing into a boon for your credit score. Stick with a loan provider that values your personal information. Contact Max Loans today!
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This publication should not be deemed as financial advice. While all care has been taken in the preparation of this publication by the writer, Max Loans and the writer give no warranty as to the accuracy of this publication and whether the information contained within it is appropriate for your individual circumstances. No responsibility is taken by Max Loans or the writer for any errors or omissions in this publication. You should seek specific financial advice appropriate to your individual circumstances before acquiring or disposing a financial product.