Veda’s new credit rating product receives mixed response from property investors
Credit rating agency Veda Advantage’s product overhaul has received a mixed response from property investors as they prepare for the new scoring system to come into effect next week.
Monday, July 20th 2009, 12:00AM
by The Landlord
Veda will give credit applicants a score of between minus 300 and positive 1,000 to indicate how creditworthy they are, with an average score between 500 and 600.
The new regime hasn't been welcomed with open arms by the New Zealand Property Investors' Federation, which will see its costs rise some 65%, according to association president Martin Evans.
"We were quite happy with the old way," which it negotiated with previous owner Baycorp, and allowed the association to offer its members discounted access to the service, Evans said.
"We're still negotiating," said Evans, who is confident some kind of agreement will be reached.
Capital Property Investors Association president Alistair Gillespie is more upbeat about the new regime, but said they will have to wait and see "how it works" before they can really pass a final judgment on the new product.
"We're strong users of the product, and this is going to give us better judgment" as to the quality of our tenants, Gillespie said.
Veda expects people who are given a score of below 100 will struggle to obtain credit, but both Gillespie and Evans expect their members will not be too inflexible when it comes to credit risks.
"Often, people with debt are doing something about it and we're still keen to talk to them," Evans said.
The new system will compare people's credit information to the wider population, and Veda expects it will make it easier for people to secure credit.
Veda currently provides credit reports for its customers which outline how many times someone has applied for credit, and whether they have defaulted on their loans or gone bankrupt.
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