In Australia, more than 2 million people, or 13% of the estimated 16 million in the country who are using credit, are at risk of credit default.

The figure includes about 600,000 people who are at "high to extreme risk" of defaulting, an analysis of credit records by Australian credit agency Veda shows, according to a report in the Sydney Morning Herald.

Under a new credit reporting system that started in Australia in March, credit agencies are collecting more information. Monthly payment histories on loans and credit cards are now shown and reports note any missed payments of more than 14 days. Before the change, credit reports kept only negative information, such as missed payments of more than 60 days and bankruptcies.

The credit agencies that lobbied for comprehensive reporting believe including repayment history on credit reports will help people with poor credit histories show lenders that they have changed their ways. Veda, Australia's largest credit reporting agency, was among those that pushed for comprehensive reporting.

In the U.S., which has had comprehensive reporting for years, as have most developed countries, lenders use  credit scores, along with factors such as income, employment history and financial commitments, to assess loan applicants. Americans with poor credit records commonly pay higher rates of interest when taking out a new mortgage than those with good records.

Veda CEO Nerida Caesar believes the development of more sophisticated technology, which allows easier credit checking together with comprehensive credit reporting, makes it inevitable that most lenders will move to risk-based pricing.

In June, lender SocietyOne became the first to publicly declare it would use "risk-based pricing" for loan applicants. SocietyOne differs from most in that it does not lend the money itself, but sources money from private and institutional investors. It only has one consumer credit product available: an unsecured personal loan for amounts between $5,000 and $30,000 for a term of up to three years.

An analysis by Veda shows that those aged in their 30s and 40s have the highest risk of default over the next 12 months. People in their mid- and late- 30s and 40s have young families and are often under financial pressure, the most likely reason for their higher risk of default than those in other age groups.

The Veda research shows women have better average scores than men. The research also shows that almost 80% of people have never checked their credit report.

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