The good news on CCR
There is growing confidence among consumers in comprehensive credit reporting with 20 per cent now feeling more confident and in control of their finances than they did 12 months ago.
This is twice as many the consumers we surveyed last year, according to Equifax’s Matthew Strassberg.
The results were reflected in the 2018 Equifax Australian Credit Scorecard.
Strassberg said that CCR data has reached a critical mass – that is more than 40 per cent of total credit active accounts include comprehensive credit information – which is good news for both consumers and lenders.
“The key thing here to flush out is that people who have experienced an adverse credit event in the past, will now have access to credit if they have been able to improve their credit history.
“Lenders can now view these accounts with greater confidence and provide consumers with better priced credit options,” he said.
He also sees the framework supporting better responsible lending in a post Royal Commission world.
“At a time where lending standards have come under scrutiny and tightening, CCR will be able to provide more accurate and predictive scores, giving both lenders greater confidence in lending,” he said.
The scorecard also showed the inclusion of repayment history information in consumers’ Equifax credit scores which has created a net lift in the average Equifax score nationally, which currently sits at 820.
This scorecard which combined analysis of more than two million Equifax scores with consumer research on the attitudes of 1,000 Australians, noted that this score falls in the ‘very good’ range.
However, the survey noted that “pockets of risks remain” with 12 per cent of Australians feeling anxious about their finances and 27 per cent word about their debt levels.
Of all the generational groups, millennials are most worried about their current level of debt (35 per cent versus 27 per cent nationally) and more likely to believe they have a bad credit rating (28 per cent versus. 19 per cent nationally).
Millennials have the lowest average Equifax credit score of all the generational groups, sitting at 731.
Generation Xers have an average Equifax credit score of 829, while Baby Boomers and the Silent Generation are well above the national standard with average Equifax credit scores of 888 and 904 respectively.