Banks and credit reporting agencies have welcomed plans to increase the level of credit information available on a person but say more could be done to reduce lending risks.
The Privacy Commission last week released a proposal to change the Credit Reporting Privacy Code 2004 to allow credit agencies to
collect information on the type of credit account a person has, the limit on each account, who is providing the credit and the status of the account.
Presently they can only collect information on credit defaults, judgments and bankruptcies, data considered to give only a "negative" picture of someone's credit history.
Philip van Dyk, spokesman for the New Zealand Bankers' Association, said the proposed changes represented good progress in helping banks make better credit decisions. But they should go further.
"We think the proposals should go further and allow credit agencies to collect information on both payment history and the current credit balance."
Van Dyk said the additional information would help provide a verified accurate picture of a customer's ability to meet their obligations. Seeing a person's payment history would give information about what sort of customer the person was, he said.
The current credit balance would also enable financial institutions to find out how much of the limit people had used on their credit account.
John Scott, Dun and Bradstreet's New Zealand general manager, said a move to positive data was a good step.
"But more information is something we would welcome as well."
But he said the change had to be managed carefully to ensure people were comfortable with the information available about them.
One of the additional safeguards proposed would be an external audit of the way the credit agencies collect the information.
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