Credit checks fall, defaults jump: Veda

Monday 26th July 2010

New Zealand credit inquiries fell 10.4% in the first six months of 2010 compared with the same period last year while defaults jumped 18.3%, says credit information company Veda Advantage.

“We believe this shows the impact of the credit crunch,” says Veda Advantage managing director John Roberts.

Nevertheless, a review of 1.26 million consumer credit records between July 2009 and March 2010 shows the general population's risk profile improved by 12%, Roberts says.

There could be a number of explanations for this.

“It could show that people are paying off debt or that fewer people are actually taking on credit or a combination of both factors,” he says.

“These findings may also reflect the cut-back in the amount of credit being offered to people by banks and finance companies.”

Possibly, only low-risk applicants are being offered credit now.

The improved risk profile should mean fewer people defaulting on loan repayments over the next 12 to 24 months, he says.

Businesswire.co.nz

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