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Brandis weighs in on credit report grace period

Attorney General Senator George Brandis has requested the Australian Retail Credit Association (ARCA) vary the Credit Reporting Privacy Code so the current five-day grace period for late payments recorded on a consumer’s credit report is extended to 14 days.

As the developer of the CR code, ARCA has said it will now make an application to the Office of the Australian Information Commissioner to vary the CR code, which went live following the start of comprehensive credit reporting in Australia on 12 March.

“Given the concerns raised by the community and reflected by the Attorney General on this matter, we agree that a 14 day grace period is an appropriate compromise before a late payment is recorded as Repayment History Information,” ARCA CEO Damian Paull said.

Following the March changes, comprehensive credit reporting now includes Repayment History Information, which shows payments made or missed for each month over a 24-month cycle on a consumer’s credit report.

Importantly, there is a tangible distinction between ‘late payments’ and ‘defaults’.

“One late payment on your credit report is less serious than a default. Any of us can be on holidays or forgetful, and a late payment can be offset by an overall positive history of paying most accounts on time. Defaults on the other hand are always more serious,” he said.

As of 12 March 2014, defaults can only be recorded on your credit history if the payment is more than 60 days overdue, is for a debt of more than $150, and you have received written notifications prior to the listing of the default.

“It’s also important for consumers to understand that only credit providers with an Australian credit license can report and obtain Repayment History Information – so late telecommunications or utilities bills will not be included on your credit report,” Paull added.

ARCA has developed www.creditsmart.org.au to help consumers navigate the changes to the credit-reporting regime and understand their new consumer rights.