Five things you need to know about Comprehensive Credit Reporting (and how it may affect you)
Comprehensive Credit Reporting is a regime that helps lenders judge how well you can manage your borrowing commitments and make repayments. Let’s take a closer look at what the system is, how it works and the potential impact on credit scores.
1. Changes happened in 2014
Comprehensive Credit Reporting was introduced in 2014. It allowed banks and lenders the opportunity to provide more information to credit bureaus about the accounts you hold with them.
2. Your score may change
The availability of more data on your credit file means that your credit score may change. However, that’s not certain. Credit Simple’s analysis of Australians who had data from a Big Four Bank on their files showed that 52 per cent of those people saw their credit score increase after the bank started contributing information. Meanwhile, 45 per cent of credit scores fell and 3 per cent remained unchanged.
3. There may be more credit information on your file
Thanks to CCR, you may start to see more credit information within your Credit Simple dashboard. This information may include the dates you opened and closed an account, the type of credit account you hold, your credit limit, and your monthly repayment history. Log in and see what’s changed.
4. CCR is a good thing for Aussies who pay their credit repayments on time
CCR is good for consumers, as it builds a more robust and detailed picture of your credit habits – basically, whether or not you’re a good customer when you’re using credit. Information being added may help to build a more thorough picture of how you handle credit and make payments, which may give credit providers a better idea of how much they should lend to you, and on what terms.
CCR also helps to build a more thorough picture of your credit information, which may make it easier for you to quickly build a credit file showing consistent repayment history, as well as possibly showing if you’ve recovered quickly after a negative event such as a default. CCR may help increase competition among credit providers so consumers can win through better deals.
5. Our mates across the Tasman are already all over CCR
In New Zealand, CCR was officially introduced in April 2012. Kiwis with positive reporting data included in their file have credit scores that are an average of 100 points higher than before. While CCR may not result in easier access to credit for everyone, the changes should bring greater transparency to lending decisions and may help people recover more quickly from adverse credit situations.
More on Comprehensive Credit Reporting and how you can get a better deal: