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Each New Zealander's last 200 payments on bills would be kept on record for scrutiny by banks in a proposal by the Privacy Commissioner, Marie Shroff.
The proposal, which is open to public submissions, would put a person's bills on their credit record for two years - whether they were late for electricity, gas or phone bills, mortgage or credit card invoices, insurance, or other monthly payments to participating institutions.
The banking industry says that under the proposed regime, simply staying on top of bills would mean a better credit rating and greater access to loans, while people struggling to pay would avoid loading up more debt.
However, civil liberties proponents cautioned against collecting so much sensitive information.
At present, credit records show only the times when a person has inquired about getting credit and any instances of defaults, and is updated only when things go wrong.
"It has been quite difficult to get rid of bad credit experiences," Consumer NZ chief executive Sue Chetwin said. Giving credit reporting agencies more information every month made it easier for a person to rebuild their record, she said.
The proposal, which the Privacy Commissioner admits is "intrusive", would start recording from April next year whether bills were paid on time.
Credit reporting agencies would be given the authority to collect the information, but it would be up to individual companies - such as telephone and power companies and banks - to join. Firms must provide their customers' information to gain access to the databases.
The repayment histories would be presented as either a "yes" or "no" for each month per account about whether due dates were met.
The commissioner's office envisions a scheme in which the reporting agencies would mark payments as paid or missed with 0s and 1s.
Agencies and banks would then put the numbers through algorithms to determine credit-worthiness.
New Zealand Bankers' Association chief executive Sarah Mehrtens said that missing a single phone bill payment "may be unlikely" to affect the chances of getting a loan, particularly for those with records of long-term regular repayments.
But Council for Civil Liberties spokesman Batch Hales said he was "very suspicious" of the industry's claims. The collection of sensitive personal information was risky, even if there were attempted safeguards, he said.
Federation of Family Budgeting Services spokeswoman Margaret Elsworth said there were benefits to the changes, but they also caused some anxiety.