Comprehensive Credit Reporting and What It Means for You

Gino Farina Money

From July 1 2018, Comprehensive Credit Reporting (CCR) was introduced, making it mandatory for the big four banks to share information with regards to your credit report, benefiting both lenders and consumers. Lenders will be able to see a more accurate picture of your ability to make repayments and manage your credit, while consumers’ can have a more active influence over whether their future credit enquiries are successful.

What is Comprehensive Credit Reporting?

CCR, also called ‘positive reporting’, is the process of Australian lenders reporting additional information to Australia’s credit reference bureaus, who hold this information so that it is accessible when lenders need to access your credit report. CCR should allow lenders to build a more comprehensive picture of your credit history, helping them to make better, more responsible lending decisions based on your actual behaviour rather than by simply using your credit score.

What Does This Mean for You?

You have more control.
While you are currently entitled to ask for incorrect information on your credit file to be corrected, under CCR you have the opportunity to directly influence how lenders view you by ensuring you make repayments on time.
You could get a better deal on your personal loan, mortgage, or credit card.
With positive aspects of your consumer credit behaviour visible on your report, lenders can see that you represent a lower risk, and thus you will be able to access lower interest rates from some lenders.
Lenders can make better decisions, which also protects you.
As CCR will make more information available to lenders, this should enable them to make more informed decisions around credit applications. CCR could lead to more applications being accepted while also reducing outstanding debts, defaults, and other serious credit infringements.

What is a Good Credit Score?

Most credit scores sit between 300 and 750, and a higher score is better. It gives you more leverage to negotiate a better deal from banks, telcos, insurance companies and utilities. Consumers with a low score may find it harder to obtain credit, or they may be charged a higher interest rate. Typically for home loans, a minimum credit score requirement is 550, though varies by lender and is one component they review when determining borrower risk.

Want to Know More?

To find out more about CCR, your credit score and the importance of this when submitting a loan application, contact me today on 0437 763 637 or email.

If you would like to watch a short video on the topic, this one from Canstar provides a great overview.