People experiencing a run of financial hardship are to have their credit report adjusted following a new privacy code that came in to effect on 1 July.
Releasing the updated Privacy (Credit Reporting) Code 2014 (CR Code), the Office of the Australian Information Commissioner (OAIC) said it reflected amendments to the Privacy Act 1988 that related to financial hardship reporting by credit providers and credit reporting bodies.
The Office said that under the amendments, credit providers could enter into a short term financial hardship arrangement with an individual to adjust their loan repayments.
“This means that when you are in a temporary financial hardship arrangement your credit report shows your repayments against that arrangement (not their regular repayments),” the OAIC said.
“This is intended to protect you by ensuring your credit report reflects your current arrangements,” it said.
“These changes will also assist you to meet your repayment obligations if you are experiencing financial hardship, without impacting your credit score.”
The OAIC said that before 1 July, people could enter into a hardship arrangement with their credit provider however, there was no mechanism for this to be reflected on their credit report.
The Office said this meant individuals could have their credit score impacted due to missed payments being reported.
It said financial hardship information was subject to additional protections under the Act, with strict provisions around when a credit reporting body could disclose an individual’s financial hardship information.
“Financial hardship information is not allowed to be used by credit reporting bodies in the calculation of your credit score,” the OAIC said.
“Financial hardship information is only able to be kept on your credit report for 12 months. After this time, it must be deleted.”
It said credit providers would not receive information about why an individual was in a financial hardship arrangement.
The updated CR Code can be accessed at this PS News link.
