Released this week, Veda’s second Australian Credit Scorecard report showed that of the 2.1 million people at risk of default in the next year, 601,380 are at high to extreme risk.
Veda spokesperson Belinda Diprose said instances of credit stress could be something as simple as an unpaid bill, credit card or even a loan.
While the majority of Australians have a strong credit rating, there are pockets in certain regions where people are really struggling, Ms Diprose told Mortgage Business.
“It is important for consumers to understand that things that happen now can appear on their credit history and can impact their ability to get credit in the future,” she said.
Veda’a analysis looked at default as a whole, but Ms Diprose said there are probably some warning signs that people can look out for when considering mortgage default.
“If you are looking at customers that are under mortgage stress there are going to be quite a few warning signs before they actually get to the point of defaulting on their mortgage,” she said.
“People will generally default on smaller bills first.”
As a first default, more than 50 per cent of people will default on their mobile phone bill, compared to a mortgage which is less than one per cent, Ms Diprose said.
“The important thing for consumers to remember is if they are struggling to make their repayments, whether it is a mobile phone contract, credit card or personal loan, they should talk to their credit providers because there are often things that credit providers can do to help them out,” she said.