Credit card applications can be 'a black mark' on credit reports
Many Aussies are struggling to gain bank credit because of the country’s negative system of credit reporting, a commentator has said.
Alex Tilbury of News Limited found that credit reports currently consist of a list of all loan applications – but not whether they were approved as well as any defaults of more than 90 days and bankruptcies.
Mr Tilbury spoke to financial planner Joel Palmer of Palmer Portfolios who said that the focus on negatives means that every time a borrower applies for finance or defaults on a payment, the details are recorded in a database that is available to all financial institutions.
"If you apply for 27 credit cards in two months or miss a few too many payments, you’ll end up with a black mark against your name and find it next to impossible to obtain new finance," he said.
Mr Palmer’s advice may encourage bank customers to be more selective and compare credit cards instead of applying for a wide range. Last week, the Herald Sun reported that the bankruptcy rate slowed down in the run up to Christmas, improving credit opportunities for some Aussies.
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