What is comprehensive credit reporting?

The Bank currently uses credit reporting from Veda to help make decisions about whether or not to approve a customer’s application for credit. At the moment, the information we receive is called negative reporting as it mostly reports adverse credit items (or lack thereof).

In 2012, the Privacy Code (administered by the Privacy Commissioner) was changed to allow the exchange of positive credit reporting to credit agencies and the use of that information by authorised organisations, subject to the requirements of the code.

Positive reporting includes the payment history where the customer has paid on time, the type of credit, the date it was opened and the credit limit. Reporting is available not just from lenders, but also some utility companies, providing a richer source of payment data on which to make credit decisions.

For us, positive reporting means we’ll be able to ascertain whether an applicant pays their bills and credit facilities on time, better understand an applicant’s payment history and be clear on their current financial commitments. It also means that customers won’t need to ‘prove’ their credit worthiness by providing credit statements etc.

The new positive reporting combined with the existing negative reporting gives a comprehensive view of the customer’s credit worthiness, hence the name: Comprehensive Credit Reporting (CCR).

CCR is a reciprocal arrangement – it’s only available to organisations that provide the positive payment data on their credit customers. In recent months most major banks have signed up for CCR as have a number of utility companies. CCR information is now starting to become available from these participants and we see benefit to our customers in the Co-op Bank becoming a participant.

Why is the Co-op Bank signing up to it?

We see CCR as a significant mutual benefit for the Bank and our customers:

• We’ll have the applicant’s payment history for other credit and utility bills where the lender/provider is participating in CCR
• We’ll need less evidence of credit history and account conduct from new and existing borrowers
• Lending processes will be faster as there’ll be less paperwork and reduced analysis of payment and account conduct history required
• We may be able to lend more a wider range of borrowers as their payment history will be better known
• We can refine and tailor our pricing based on the risk profile of the customer
• It’ll help us to continue to be a responsible lender.

These benefits will take a while to occur: we really need to be collecting and sharing the positive reporting data for six months so that we can build up customers’ banking history. We’ll let you know when we’ve gathered enough data to change our credit criteria and processes.

How is the bank protecting customers’ privacy?

All of the data we share with credit reporting agencies is protected by the Credit Reporting Privacy Code and by the high level of data security employed by the Credit Rating Agencies.

The information can only be obtained by authorised users for legitimate purposes under strict rules. The exchange of the CCR data has been approved by the Privacy Commissioner and is explained on their website. Like us, the Privacy Commissioner sees significant customer benefits with CCR and therefore has supported it.

Customer Q&As

What information are you sharing with credit reporting agencies?

We provide information on the type of credit facility or loan , the date it was opened, the credit limit (but not the current balance), the account status and whether payments are being made on time each month. To enable accurate matching of customer records, we also supply the borrower’s name, date of birth and address information.

Who are the credit reporting agencies?

There are three credit reporting agencies in New Zealand: Veda, Dun and Bradstreet (D&B) and Centrex.

How are you going to protect my private information?

The information is protected by the credit Reporting Privacy Code and by the high level of data security employed by the credit reporting agencies. The information can only be obtained by lenders for legitimate purposes under strict rules determined by the Privacy Commissioner.

What authority do you have to share my information with credit reporting agencies?

Customers sign a privacy clause as part of their credit application or contract, authorising the Bank to provide information to other parties. This includes credit reporting agencies. We have always done this, it’s just that now, we’re providing positive as well as negative data.We have made every effort to inform customers we intend to share this information by advertising our intention extensively during August 2015.

Why is the Bank sharing my information with credit reporting agencies?

Sharing this additional information enables us to access credit payment histories for customers applying for or holding credit facilities with our bank. Having access to credit histories held elsewhere will:
- reduce the need for customers to supply credit and account histories when they apply for credit with us,
- potentially allow greater flexibility in the amounts we lend and the interest rate charged and
- allow faster credit decisions.

I don’t want my information shared, can I stop it?

No. We are obliged to provide credit performance information on all of our borrowers to credit reporting agencies. Most other banks share this information already.

Where can I get more information on credit reporting?

The Office of the Privacy Commissioner’s website has further information. If you have a concern about this change or your privacy you can contact our Privacy Officer or write to The Privacy Officer, Cooperative Bank, PO Box 54, Wellington.