Credit reporting in Australia is about to switch to positive credit reporting – but what does that actually mean? Here’s a quick recap.
The Australian Government has proposed a change. Comprehensive Credit Reporting (CCR) from 1 July 2018 is mandated.
What credit reporting means for you
Let’s take a brief look at credit reporting. Assessments of potential borrowing capacity include looking at any negative spots recorded on your credit history. Today your credit history includes:
- all credit enquiries (applications that you made for consumer credit and credit contracts), and
- negative information. Negative information is:
- significantly overdue accounts including defaults and serious credit infringements, and
- public record information.
How the proposed switch protects your credit history
The proposed change means that additional information. E.g including account opening dates, credit limits and up to 24 months repayment history, will be supplied to our credit reporting bodies for all open consumer credit accounts.
It is important to know that from April 2018. We will record your comprehensive credit information. This is in order to comply with the changed legislation and report this to the credit reporting bodies from 1 July 2018.
Australia switching to CCR has brought our credit reporting system in line with many other countries. And a positive credit rating gives you great leverage when looking for a loan of any type.
While some may raise concerns over the increased amount of personal financial information being given. The benefits of positive reporting outweigh the negligible potential drawbacks of this information disclosure. And it won’t take as long, to establish a positive credit rating. It will make it easier for you to show that you have managed your finances well.
How this benefits you
We all know that paying out bills on time reflects who we are. Now this great effort is rewarded by appearing favourably on your credit report.
Take the hassle out of remembering to pay bills on time. A missed payment on its own will not significantly affect your score. Also budget planning is worthwhile. E.g. put aside money and set up automatic payments for your bills.
And if your credit history is short. The more information in your file will prove your credit-worthiness.