Australia: Comprehensive credit reporting to benefit Australia

From the 1st of July compulsory Comprehensive Credit Reporting (CCR) will be rolled out. As a result, the big 4 banks will be required to distribute at the minimum half of their credit data, both positive and negative.

RFi Group data shows only 2 in 5 current borrowers are aware of their credit rating, with knowledge of credit score being greater amongst borrowers who have been declined for a credit product in the past.

Daniel Foggo, an Australian CEO of P2P lender RateSetter, believes the main reason for this change is due to Australians not being equipped with the opportunity to leverage their previous good credit behaviour to secure lower cost finances. In most developed nations, if a consumer has paid his bills on time, he can utilize that good behaviour and be able to access lower cost finance options.

Prior to 2014, lenders only had the ability to view a consumer’s poor credit history and ergo, could assess them based on their past record. Recently, smaller lenders have been willing sharing both positive and negative data of a consumer’s credit history to credit bureaus.

The big 4 banks will be forced to adopt this change at the beginning of July and thus lenders will have a better idea of an individual’s credit history which currently excludes positive characteristics such as if a borrower has made his monthly loan repayments on time.

Australian Consumer Lending Council Dec-17

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