KEY POINTS:
New Zealand's largest credit reporting agency is calling for changes to the privacy code to allow more information to be made available to lenders on an individual's credit card, mortgage and loan debts.
The call by Veda Advantage follows recommendations by Australia's Law Reform Commission to repeal the credit reporting provisions of the country's Privacy Act and allow companies to access information such as when a credit card was taken out, how much the spending limit was and when it was cancelled.
But New Zealand Privacy Commissioner Marie Shroff says greater debate is needed before any changes should be made here.
Under the present privacy laws only negative information, such as whether a person has been bankrupted or had a summary judgment made against them, is available to companies that undertake a credit check.
Veda Advantage New Zealand head John Roberts said allowing access to further information would give consumers a chance to build up a positive credit history and help lenders to make better decisions about a person's financial situation.
"At the moment all we have got is negative information. We don't know what we don't know. Consumers tell porkies when applying for credit cards. If you are the lender you don't know what other exposure they have.
"They could have three credit cards with other banks that are maxed out."
Mr Roberts said New Zealand, Australia and France were the only countries in the OECD to use only negative reporting.
He said overseas experience had shown that a move away from just negative reporting could dramatically reduce bankruptcy numbers, while also making the market for credit more efficient, transparent and fair.
"At the moment everyone carries the load of both good and bad credit risk."
With more information lenders would be able to give better rates of interest to those with a lower risk.
But Ms Shroff said just because other countries used more detailed reporting did not make it right for New Zealand.
"I think we need to have a fully informed public debate about it. There are arguments for both sides."
The office of the Privacy Commissioner is reviewing the privacy code and is expected to have its first meeting next week with key parties to discuss the issues.
