Australian banks get more power due to credit checks
It has been revealed that banks in Australia are to get more power when it comes to deciding who will and will not get finance, and this is due to new plans with regards to credit checking potential borrowers.
Many banks in Australia face a tough time when it comes to deciding who is and is not a safe bet in terms of borrowing money, and often banks can make the wrong decision by either refusing credit to someone that is a good payer and can afford the repayments or giving out credit to someone that turns out to be struggling financially and cannot realistically meet the repayments on the loan.
However, it has been announced that these banks will soon be able to exercise increased power and this comes as a result of new plans that will allow credit reporting agencies to collate data regarding consumers’ repayment histories. The changes are due to come about as a result of amendments that are being made to privacy laws.
There is concern that simple mistakes made by consumers could now result in them being penalised by banks. For example, something as simple as making a late payment on a bill could deter the banks from lending money to the consumer. On the other hand those that have always made timely repayments and bill payments could find themselves in for a far easier time when it comes to getting credit from the banks.
Some have expressed concern that the new plans could lead to banks getting consumers into a greater level of debt. This is because those that have perfect credit histories will possibly be targeted by banks and encouraged to get into more debt, which is something that has been identified as having caused huge problems in the United States.
Source - News