Black mark for late bill haunting thousands

More than 800,000 people are unaware their records at credit agencies list some sort of default. Photo / NZ Herald

More than 800,000 people have black marks on their credit history for defaulting on payments - and many don't know anything about it.

The Weekend Herald has learned of people being unknowingly blacklisted for unpaid bills. One woman said she couldn't get a Telecom account for five years because of a power bill she forgot to settle.

Another said her application for a home loan was turned down at first after her bank did a credit check and found she had an outstanding power bill of about $100 - which was nearly five years old.

The www.mycreditfile.co.nz website, run by Veda Advantage, has information on 97.5 per cent of "credit active" people over the age of 18.

Of those 2.4 million people, 29 per cent have some sort of default on their credit history.

Veda Advantage managing director John Roberts said 15,000 inquiries a day were made by credit providers seeking information on people seeking credit.

But he said many consumers had little idea about their credit history, which could land them in trouble when they asked for credit.

Black marks on a person's credit file range from the most serious - bankruptcy - to any account that has been overdue for more than 30 days.

These can only be cleared if the credit default information was a debt incurred through fraud, or clearly disputed or mistakenly loaded against a person's file.

Except in those cases, default records were not removed from a person's credit file for five years from the date the original payment was missed, Mr Roberts said.

"They can have it updated to 'paid' and the slate will be wiped automatically after five years."

But the chief executive of Mangere Budgeting and Family Support, Darryl Evans, said sorting out payment defaults could often be time consuming and difficult and the process needed to be made easier.

"I often find [Veda] staff are not too helpful anyway. One of my staff paid their debt in full at 3pm one day but they were still blacklisted," Mr Evans said.

"When I challenged it Veda said they gave them until 2pm."

David Naulls, the Consumer Institute's deputy chief executive, said people considering personal loans, hire purchase agreements or mortgages should check their credit history first to save being declined.

He said people tended to be blase about their credit histories - he admitted never checking his own.

The Veda Advantage credit file service costs $23 for an express file but is free if you are willing to wait for 10 days for the information.

Pam McKenzie of Auckland Budgeting Consultants agreed the onus was on consumers to check their credit histories, particularly as growing numbers favoured personal loans and in-store credit cards.

"People need to be aware Veda is there and to do regular credit checks against themselves to ensure nothing is registered against them, particularly when things aren't correct as sometimes happens."

* Check your credit record at www.mycreditfile.co.nz