20 Jul 2009

Agency to issue credit 'scores' for loan seekers

5:30 pm on 20 July 2009

A credit agency is to start issuing 'scores' to rate the creditworthiness of everyone who seeks a loan.

Veda Advantage will supply lenders with the rating in addition to credit reference checks the company already carries out.

The scale it will use runs from minus 330 to 1,000 although the firm says most New Zealanders will have a score above zero.

It says a person with a score of 100 or below will find it difficult to get credit.

Veda Advantage managing director for New Zealand, John Roberts, says the information will be primarily given to small to medium sized businesses, since banks and trading institutions have own scoring system.

Mr Roberts told Morning Report, the score system will be clearer and more up-to-date than previous ways of presenting the information.

The system is due to be launched on 2 August.

Thumbs up from budgeting service

Federation of Family Budgeting Services chief executive Raewyn Fox says the more information is made available about people's creditworthiness, the more informed lenders will be about the ability of people to repay.

Ms Fox says the rating system will also help borrowers make more informed decisions.

She says even if some people do rate poorly, having more information out in the open will give them a better idea of what is required for them to get back into lenders' good books.