New Zealand's biggest credit referencing firm, Veda Advantage (formerly Baycorp Advantage) has announced it plans to launch a US-style credit scoring system in New Zealand from August 2. In America the most popular credit scoring system is run by Fair Isaac Corporation and is known as a FICO store. Americans often know their score off-by-heart and work hard to improve it or avoid being downgraded. The FICO score ranges from 300-850 is used by credit card providers, mortgage lenders and hire purchase lenders when assessing a credit application. Here is more background on the US credit scoring providers and how it works. VedaAdvantage said its 'VedaScore Plus' would have a scale running from minus 330 to 1000, although most New Zealanders would have a score above zero. Here's more below from VedaAdvantage's release on this.
A person with a score of 100 or below will find it difficult to obtain credit from a bank or finance company. The average score will be in the range of 500 to 600 whilst a person with a score of 700 will generally be a good credit risk. Managing Director for NZ & International John Roberts says "New Zealanders need to better understand their own personal credit rating and the impact of a good or bad rating on their financial position." This becomes even more relevant if New Zealand like the rest of the OECD world moves towards a comprehensive credit reporting regime over the next few years as a credit score takes on even greater currency as to a person's potential ability to take on additional credit. Veda Advantage recognises the efforts being made by government agencies, banks and now schools to improve financial literacy among New Zealanders. The company's credit scoring system will assist these efforts by providing greater transparency and understanding about individual credit worthiness.
Your view? I'll ask Alex to follow up on this story tomorrow. What would you like to know? We welcome any comments and questions in the comments below. My first thought is how can New Zealanders get hold of their score? Who will pay for it? Can you dispute your score?
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