Credit reporting law change
Credit Reporting Law Change Huge Benefit to Consumers
A change to New Zealand’s privacy laws is a game changer for consumers in the market for personal loans, says Harmoney, New Zealand’s largest online lending marketplace.
The law change will free consumers up to shop around for the best personal loan terms available to them, without hurting their credit score.
From October 1, an amendment to the Credit Reporting Privacy Code will require lenders such as Harmoney, which ‘rate for risk’ and advertise a range of interest rates for personal loans, to offer customers an accurate quote based on the information in their credit file.
The change also means accessing that information for a quote must not be used by credit bureaux to negatively affect the credit scores they calculate for those customers. A credit check will only be recorded against the customer's credit file by the credit bureaux if the consumer proceeds with a loan application.
Harmoney’s Head of Product Dan York says the change will free consumers up to shop around for the best loan terms to find loans they can afford, without damaging their credit score.
Traditionally, all lender reviews of a credit file have been recorded as a credit check by credit bureaux as an indicator of whether that person may be applying for multiple lines of credit at once and be financially distressed. Multiple credit checks can have a negative effect on a person’s credit score.