The lowdown on your credit score
There is a secret file that contains some of your most intimate information.
It not only contains your name, address, age, and driver licence details, but how often you get behind on your credit card, and whether you have paid last month's power bill.
The information gets sold on to third parties who want to snoop on you.
But this is not the work of the GCSB or the NSA - it is your friendly neighbourhood credit bureau.
To be fair, credit bureaus collect this information for good reason.
As it is your private data, you have a fundamental right to see what they have got tucked away in their filing cabinets.
As of September 1, it is going to get much easier to get your hands on your personal dossier in a timely fashion.
Last week, Privacy Commissioner John Edwards laid down the law.
New Zealanders had typically been expected to pay a fee if they wanted to access their information quickly, he said.
"This was permitted under the law on the understanding that credit reporters would act reasonably," he said.
"Some credit reporters weren't, so I decided to place a limit on the amount they could charge."
Now bureaus will not be allowed to sting you more than $10 for fast-tracked service, a huge reduction from the dominant market player Veda's $51.95.
Competition is also helping to improve access.
Rival bureau Dun & Bradstreet already charges only $10, and relative newcomer Centrix is even better, offering reports for free in as little as 48 hours.
The Privacy Commissioner's amendment is timely.
Credit bureaus are storing more personal information than ever before, so it pays to regularly check up on what dirt they have on you.
The switch to "comprehensive" or positive credit reporting means it is not only black marks that appear on your file now. Previously it was mostly insolvency notices or defaults on bills.
Now there is a whole history of payment information being uploaded for loans, power and phone bills, whether it is positive or negative.
The rules were changed because the Privacy Commissioner's office decided that on balance, people would be better off.
Better credit information was meant to bring lower costs for lenders, allowing them to reduce some of the margins on their loans.
More than two years down the track, it appears that not much has happened.
No brownie points
BusinessDay requested free copies of credit files from all three bureaus.
With its 20-day waiting period and refusal to accept application through anything except snail mail, Veda took too long to be included in this story.
That will change soon, says managing director John Roberts.
Veda is introducing a new online customer identification system which will be in place by September.
The other two bureaus got back promptly, but with deflating results.
The file requested should have shown lending relationships with four banks, and presumably power and telecommunications companies too.
However, Dun & Bradstreet's file was a blank slate - nine pages of "no information recorded".
Centrix's report featured some repayment information from a Kiwibank credit card, but nothing else.
In the old days, a blank slate is exactly what you would want. The only things to show up were the bad stuff.
But under the new regime, it seems you are still not earning any brownie points for years of faithful bill-paying.
Comprehensive credit reporting has been allowed since April 2012.
That is two years and four months ago, so what has been happening?
Centrix managing director Keith McLaughlin says close to 20 organisations have had to put their heads together and thrash out some common rules.
"It took probably 18 months to agree on data standards and reciprocity," he says.
"You can imagine that when you've got competitive organisations ... sitting around the table trying to agree rules and standards, it doesn't happen quickly."
While they have agreed on a uniform way to prepare the data and who gets access to what, customers still have to be informed about the changes.
Finally, there have been technical difficulties in having to update legacy systems.
McLaughlin says most major lenders have more-or-less automatic systems used to approve or decline loans.
"Putting comprehensive across the top of that changes that whole dynamic," he says.
"They will have to re-engineer their decision process, and that's a quite a big job as you can appreciate."
So have the various credit providers actually started uploading information yet?
"The short answer is, some have," says Roberts.
Three major banks are on board, and a couple of finance companies, he says.
Of the big banks, ASB, Westpac and Kiwibank are already starting to supply comprehensive information.
BNZ says the bank is committed to doing so and is working through the process, while ANZ says it is "working with the bureaus on future participation".
Roberts says other credit providers and telcos are actively getting their systems in order and customers alerted. Utilities appear to be a little slower.
It's not a question of if, but when, he says.
"We're predicting within 12 months we'll have 85 per cent of the market."
The more organisations come on board, the more accurate the credit reports become.
Veda is currently the only company that offers a "credit score" alongside the raw data on your file.
It has just launched a new scoring system which includes the new information, which already scores 30 per cent higher on what the industry calls the "gini" measure of predicting behaviour.
Centrix currently displays red and green boxes which indicate whether payments have been missed or defaults entered each month.
The report we requested was marred by a slightly darker shade of green for a missed payment in April, for example.
McLaughlin says Centrix will also offer a credit score soon.
"As more info becomes available, the accuracy sharpens up."
The Privacy Commission has committed to keeping track of whether or not the claimed benefits of comprehensive credit reporting actually come to fruition.
Edwards says it is still too soon to make a call.
"We'll be reviewing the code again in 2015. A major part of that review will be to assess the operation and consequences of the positive reporting changes."
For now, it is best to keep a close eye on what is going on with your credit file, as the information starts flowing.
It is free, or $10 at most, and a crucial part of keeping track of your overall financial picture.
What do banks do with your information?
Besides uploading the new information, lenders are also starting to factor it into their lending decisions.
ASB's head of home lending and term deposits, Vince Clark, says the bank will start doing so "in the near future".
Most lending decisions are based on principles of willingness and capacity to repay, he says.
Willingness relates to your track record, such as staying up-to-date with repayments or making sure you catch up with any that are late.
Capacity to repay is about having enough income to meet repayments once other expenses are accounted for.
Clark says it often also helps if customers have built a relationship with their bank over time, especially for the big stuff, like mortgages.
If you do make one stuff-up, he says it won't necessarily ruin your chances either - it is about the big picture.
Most defaults also drop off your file in five years, leaving you with a clean slate to start again.