Almost 3 million Australians could suffer from credit score fall in next 12 months due to credit default

Credit scores of almost 3 million Australian credit card holders could fall in the next 12 months, Australia’s largest credit bureau warns. The culprit is when they default on their credit such as an unpaid mobile phone bill of $150 which is overdue for 60 days.

Swiping the credit card has become a practice among Australian shoppers whose credit card debt has reached $51.3 billion. Most of these credit purchases were for groceries and utilities, according to a report by a financial comparison website in early October.

Veda, the credit bureau, says the average credit score in 2016 of Australians is 757, already down by 14 points from 2015’s 771. However, 757 is still good based on a score range from zero to 1,200, Sydney Morning Herald reports.

The highest average of 836 points belong to the Silent Generation, or the seniors. They were followed by Baby Boomers (805 points), Gen Xers (759) and Millennials (712).

Residents of the Sutherland region in New South Wales logged the highest average score, while the lowest belongs to resident of the Logan-Beaudesert region of Queensland. Veda estimates that 17 percent of credit active Australians, or 2.86 million people, are at a risk of credit default in the next 12 months, based on a new Veda report of 1,000 respondents and the bureau’s analysis of 2 million Vedascores.

“Although the majority of Australians consider themselves financially responsible when paying bills and sticking to a budget, a quarter of the population (26 per cent) are splashing their cash on things they know they will struggle to repay,” a Veda spokesperson points out. High on the list of overspenders are millennials, with 36 percent of people below 30 years admitting to spending beyond their capacity to pay, Tenplay reports.