From 1st July 2018, comprehensive credit reporting (CCR) will become mandatory, meaning banks will be forced to share detailed positive and negative financial history with other lenders.
Currently, most lenders only share negative information such as credit applications, defaults, overdue payments, bankruptcy and judgments. Under the new regime, they will now also have to share positive information, such as when you made all your repayments on time.
With CCR a more complete picture of an individual’s credit profile can be held on their credit file.
While some may raise concerns over the increased amount of personal financial information being given to parties with whom they have not had past dealings, the benefits of positive reporting will mean that it won’t take as long to establish a positive credit rating, and it will make it easier for customers to show that they’ve recovered and stabilised their situation after a negative event.
The introduction of positive information means a history of making regular payments, repaying a loan early or closing unused accounts, can help a borrower demonstrate their creditworthiness and ultimately be rewarded with a better deal from lenders.
Along with bringing positive changes for both lenders and clients, Australia switching to CCR will bring our credit reporting system in line with other OECD countries, many of which already having some form of positive credit reporting.