Credit rating danger.

Illustration: Karl Hilzinger

Hey. Your last credit card bill. Do you remember when you paid it? Did you check the date it was due? Or did you just pay it when you had the spare cash?

And the one before that, say, the one that was due in December when you were busy spending and not paying bills?

Okay, final question. What about the credit card bill you received in January last year. You know you were busy trying to reshuffle your finances after the mayhem of Christmas and New Year - but did you pay that bill on time?

I only ask because from next month any time you are five days late on a bill from a licensed credit provider, that late payment will go as a little mark into your credit history file. A little black mark.

Every. Single. Time.

This new legislation sits in the Privacy Act (loosely named, really, since we don't have any). From March there will be extensive changes to the credit reporting rules in that act and there will also be an accompanying code of practice, drawn up by the Australian Retail Credit Association.

The association drafted the code but it will not be responsible for it. That's the job of the regulator, the Office of the Australian Information Commissioner. Of course, both bodies called for submissions and consultations. And, of course, they ignored the majority of the input of consumer advocates with decades of experience.

Credit card payments. Mortgage payments. Car loans. Personal loans. If you have a loan from a bank or mutual bank - or any other providers licensed to give you money - and you are just five days late, it will go straight to your repayment history. That history will be available for any lender to check out if you ever need money again.

These dramatic changes are taking place and no one is telling us about them. There are no advertising campaigns. There is no education process. Just a daggy little website called Credit Smart run by ARCA, the peak body for those same lenders that will be running surveillance on your records. The animations. The script. Cringeworthy.

When did ARCA launch the website? The press release says late January.

What's worse is that the scheme is retrospective. So it's not as if you can decide to be meticulous from this very moment. Nope. From December 2012, if you were late it can be uploaded to your file.

Nor do the banks or mutuals have to make a song and dance about it. Nope. They can just send you one of those bland terms and conditions emails or letters and you will not even recognise that you are about to be watched with an auditor's eye.

The way it's been promoted by some is that this will mean those of us who pay on time will be able to get discounts.

But Kat Lane, the experienced consumer credit advocate at the Consumer Credit Legal Centre NSW, said that overseas experience reveals punctual payers may not get benefits. Instead, the information will be used to target those who pay late. You can imagine, can't you? There are lenders who will go after vulnerable consumers and charge them accordingly.

Lane said consumers would certainly be able to use external dispute resolution if they want to challenge what is held on their files - but that may take months. The Financial Services Ombudsman is already a very busy agency.

The fact is, this is all about the convenience and protection of lenders and not about the safety and security of consumers.

Last year, the Australian Retail Credit Association conducted a survey on what Australians thought about credit reporting. Not much - in fact 60 per cent of us had no idea what that term meant. And those of us who did know something, thought of credit reporting as negative.

Damian Paull is CEO of ARCA, which is charged with educating people on these changes. I asked him if he'd ever paid a bill late.

He said: "I'm far more conscious now of tracking when my bills are due … my behaviour has changed and my consciousness has changed since I've become more aware."

Which is lucky for him, with plenty of notice and a wealth of understanding from years in the industry.

The rest of us aren't so lucky. And it won't be long before utilities bills join home loans and credit card payments. I fear it will be telco bills. Telcos argued hard for repayment history.

And I predict our - so far - safe and successful lending system will be riddled with the damage done to people persecuted by lenders with no hearts and no discernment, just their little black credit records.

Twitter @jennaprice or email jenna_p@bigpond.net.au