The ‘credit amnesty’ comes into effect on 1 April 2014 and will require that certain negative information, listed on a consumer's credit record, be removed as soon as the consumer has paid the debt.
One of the aims with granting the amnesty is to provide consumers that have negative credit records, with new opportunities to access credit. Adversely, it will affect lenders' ability to price their risks when approached to extend credit as they are now unable to distinguish between good and bad credit behaviour. They will therefore be much more cautious in applications and this is likely to diminish the amount of loans granted. As a protective measure, banks are likely to increase the price of credit and lending rates for home loans.
Good advice to consumers: pay your debts in order to increase disposable income and then save up for a deposit before applying for a home loan.