An Auckland Powershop customer did the right thing by checking her credit report after the company said she was in arrears, even though she was up to date with her payments.

The news story this week demonstrates the impact wrong repayment information can have on an individual, particularly when it shows up on their credit report. It also highlights the importance of regularly checking your credit report to ensure the information on it is correct.

Payment arrears

In the story, the Auckland woman was upset to find out her credit report said she had been behind on her Powershop bill repayments for an 18-month period, despite having paid on time each time by direct debit.

Powershop used a system that allowed customers to buy “Powerpack” bundles of electricity when it suited them. It allowed them to have the option to adjust the due date of their payments within a 10-day period. But using this option counted against the Auckland customer by showing her as being behind on her payments, even though she was paying each bill by her adjusted due date.

“If their system is reporting aged debt when it is not aged debt at all, that is a serious issue,” she told Stuff.

Powershop has responded by changing its systems so that customers taking up the offer of payment flexibility are not impacted.

Credit Reporting Privacy Code

By checking her credit report, the customer was exercising a right she has under the Credit Reporting Privacy Code issued by the Privacy Commissioner. Among other things, the Code gives consumers the right to check information that is being collected about their credit worthiness - and their credit score which the credit reporter assigns as a result of that information.

We’ve written before about how the impact of an erroneous credit report on individuals can be extremely distressing. You can read about a significant case here.

As a consumer, it’s important to know what you can do to protect yourself and to ensure that businesses and credit reporters are sharing credit information about you that is correct. Here’s what you need to know:

• Regularly check your credit report, especially if you're about to seek credit: Your credit information is changing all the time and could have a big impact on you. It's free to check with a credit reporter so do it regularly.
• You have the right to seek correction of credit information: Inaccurate information could affect your ability to get credit. You can ask credit reporters to correct your information, and they'll work with credit providers and others to assist you, so contact them and get it sorted before you seek credit. 
• If you believe you're at risk of identity fraud, ask credit reporters to 'freeze' your credit information until the risk has passed: You can ask credit reporters to suppress ('freeze') your credit report if you believe you're at risk of fraud. This will help stop new credit accounts being opened in your name. 

You can find out more on our website, such as:

• How can I get my credit report? 
• Who can see my credit report? 
• Why are credit reporters allowed to collect my information? 
• Who are the main credit reporters? 
• How do I correct my credit report? 

Image credit: Credit reporting via Marshall Freeman.

Credit reporting