A new study by Dunn and Bradstreet suggests that in the next 12 months over a quarter of Australians will fall into arrears with their mortgage.
Younger Australians and those in lower income households are more likely to be late with paying their bills as well as their home loan.
One in five older Australians (aged 50-64) indicated they will pay at least one bill late – this compares to one in three for the two younger groups (18-34 and 35-49).
Meanwhile, 30 percent of people in high income households ($80,000+) said they expect to pay late in the year ahead – this figure jumps to 37 percent for households earning less than $80,000.
One of the most significant findings of this study was that majority of Australians did not understand the implications of paying their bills late. More than half the people interviewed stated that they would be more likely to pay their accounts on time if they knew late payments were listed on their credit report and could negatively impact their credit profile.
Not enough people understand that a payment can be listed on an individual’s credit record if it is 60 days overdue. New Australian credit reporting laws – which have been accepted by the Federal Government – will allow payments to be listed on an individual’s record if they are just one day late,” the report said. Such credit reporting will undoubtedly create more non-conforming loan inquiries over the next 24 months.