People are risking their ability to borrow to buy large assets like houses in the future by defaulting on debts for very small sums, especially when they are young.
The average value of debt referred for collection in the December 2007 quarter was less than $390, credit ratingcompany Dun & Bradstreet said. The figure was slightly higher at $400 for people under 25 years old.
"Too many people believe that small debts are not as important as larger ones and consequently don't pay them the attention they deserve," said D&B general manager John Scott.
"However, consumers must understand that small debts can be listed on your credit report and can impact your ability to access credit in the future."
Research showed that people who defaulted on small debts were more likely to default on other debts in the future.
"This means that small and non-bank defaults are increasingly being considered by lenders for the credit assessment and consumers must understand the impact of not paying proper attention to their debts," Mr Scott said.
Young people consistently had the highest average debt values referred for collection over the past 12 months.
Those aged 65 years and over were the best payers and on average defaulted on smaller amounts. The average level of debt referred for collection for the over 65 age group was $280.
Women were getting into trouble for higher average amounts of money than men.
South Island residents defaulted on higher average amounts and were less likely to pay back the debt than their North Island counterparts.
