New Zealanders are continuing to turn their backs on credit in an effort to pay off their debts, credit bureau Veda Advantage said.
"Consumer appetite for credit is down, people are moving to consolidate debt and mainstream banks are, in part, stepping into the void left by the finance companies
via personal loans," managing director John Roberts said.
Veda believes the most significant shift in people's attitudes to credit in the last 20 years is under way. There was a "radical change" in the lending market, Roberts said.
The last three years had seen a "massive" 30 per cent fall in all credit inquiries, he said.
However, by the end of August 2010 credit inquiries were down 11 per cent year on year and defaults were up 9 per cent.
Credit card inquiries were down 24 per cent, compared with August last year, as people turned to debit cards instead, he said.
Between July 2009 and March 2010 the general population's credit risk-profile fell by 12 per cent.
"But at the same time the availability of credit has tightened with banks and finance companies only offering credit to low-risk applicants," said Roberts.
Last month hire-purchase applications were down almost 7 per cent on August last year, reflecting the demise of 83 finance companies which had been the traditional hire-purchase lenders, Mr Roberts said.
- NZPA
