If you haven?t been paying your bills on time, perhaps you should be concerned.

If you haven?t been paying your bills on time, perhaps you should be concerned. Photo: Quentin Jones

Major changes to credit regulations are afoot that will add to the information licensed credit providers can share with each other. Until now they had not been able to supply comprehensive repayment history, but all that is about to change. From March 12, your bill-paying habits are being watched.

What are the changes?

The changes are to the Australian Privacy Laws, which will allow information additional to default data and failed lending applications to be included on your credit report.

This information now includes 24 months of your repayment history for loans, credit cards and other credit. So if you haven't been paying your bills on time, perhaps you should be concerned. But on the positive side, if you pay regularly, this is new information that a credit issuer will be able to consider.

The peak body for credit providers and credit reporting bodies, the Australian Retail Credit Association (ARCA), has launched a website (creditsmart.org.au) to inform consumers about the changes. The launch follows research that found many consumers were not only ill-prepared, but also unaware - 59 per cent - of what was about to happen.

''What awareness existed was negative,'' says the ARCA's chief executive, Damian Paull. ''We were concerned that consumers … wouldn't have access to, or might not be able to understand, what the changes mean.''

The new data

It's important to realise that credit providers will be able to collect and disseminate only repayment history information from other licensed credit providers. This means that your repayment history for your telephone, mobile, internet, utilities, etc, will not go on record.

However, other information about whether you have any of the above products will be able to be collected. ''Telcos and utilities can share the additional four data elements,'' says David Grafton,an executive general manager with credit bureau Veda.

Those data elements are: The type of consumer credit; the terms and conditions; the credit limit and the day on which the consumer credit begins and the day it is terminated. ''That will also help consumers who don't have a credit file now because they are not in the credit system, but a lot of people do have mobile phones. While repayment history won't be there for those products, the fact that they [consumers] have them could be,'' Paull says.

Communications

Paull says there are no requirements about how banks must notify you before they start collecting information. ''Certainly there is a requirement under the legislation - organisations entitled to collect that information are required to disclose,'' he says.

Most credit providers will have notified their customers of the changes and you should have already received a letter. For example, ANZ has sent a brochure to all existing customers, and is notifying customers who have signed up for products since then.

Commonwealth Bank notified all its customers with a letter accompanying its statements in January. Westpac said it was ''working through how we will communicate to customers about these changes''.

Your credit report

All this information now forms part of your credit report. This has always been available to you, but it can now include the extra data.

''Remember also that credit providers are not going to suddenly be supplying this information from day one,'' Grafton says. ''It's going to take a couple of years [for all the information to become available].''

Organisations, such as Veda, Dun & Bradstreet and Experian Australia Credit Services, provide credit reports and credit scores in some instances, but you also have the right to obtain once a year one free credit report from each credit reporting body, as their reports might be different. You can also get a free credit report if an application for credit was declined in the past three months.

According to research conducted by Veda, many of us don't even know we have credit reports. ''[We found] 80 per cent of Australians hadn't checked their credit report and more than half of them didn't realise they had one,'' says Veda marketing manager, Belinda Diprose.

The best reason to obtain your credit report, particularly if you're having problems obtaining credit or loans, is to work out how to fix it. There could be a mistake by the credit reporting agency, or the creditor, which could be easily fixed. If the creditor won't help, contact the Financial Ombudsman Service or the Credit Ombudsman Service.

Of course, the best way to make sure you've got a clean record is to make sure you pay all your bills on time.