Credit Reporting and You 

What is Comprehensive Credit Rreporting? 

 

In short it means that credit providers (lenders) are obligated to share more detailed information with credit reporting agencies.
 

The fundamental difference is that previously much of the data collected in credit files focused on negative information such as missed or late payments, but now lenders must also share positive information including repayments made on time.
 

For borrowers, this legislation aims to correct an imbalance and improve access to credit data so that lenders can better assess an individual’s creditworthiness and risk. Ultimately, this gives lenders a more accurate and fairer view of your ability to repay your debts.
 

So now, if you were to apply for a loan, the lender will likely have a lot more information and data to assess you on.

When does it take Affect?

The major big four banks are all required to share this data already but the remaining financial institutions are required to share from 01 July 2020

What do Lenders Report?

 

Credit information

Credit Inquiry Information

Credit Type applied for 

Credit amount applied for 

Date opened - credit amount 

Credit account type - open

Date closed - credit amount

Maximum credit amount available per account 

New and previous credit amounts

Conditions related to repayments

Credit provider name and licence details 

Overdue consumer credit account details 

Monthly repayments for the last 2 years

Default agreement details 

Commercial credit applications 

Overdue commercial credit account details 

Before CCR

Yes

No

No

No

No

No

No

No

No

Yes

Yes

No

No

Yes

Yes

After CCR

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

This information is Reported and updated monthly to ensure clarity of information disclosed

How long does it remain on my credit file? 

Most negative information, such as a default, will stay on your credit report for a period of 5 years. This means that if you have had an overdue account in the past 5 years, this will be visible on your credit report. A clearout, however, remains on your report for 7 years. A clearout is when your lender is unable to contact you when they have made sufficient efforts to.

General data on your repayment history information only stays on your report for 2 years. Any credit enquiries, court judgments and summons will remain on the report for 5 years.

What are the Benefits?

 

The introduction of CCR could provide buyers with a few benefits. individuals that have shorter credit histories will benefit from the change as their credit report will now include positive information such as on-time repayments. This can make it easier for them to apply for credit.

Credit scores will also require more negative activity to be recorded. As credit scores would only account for negative activity in the past, it was easy for an isolated event of a missed repayment to affect a buyers credit score. With positive activity contributing to the score, the gravity of negative activity is reduced.

The great thing about CCR is that even if you have defaulted on a credit repayment in the past 5 years, you may still be able to access credit because now lenders will be able to see the positive elements of your good credit history.

So the good news is that if you’ve been making regular, on time payments towards a personal loan or your credit card, lenders may take this into consideration when assessing your home loan application.

How do i get a copy of my credit file?

 

As this is a new change, it does take time for information to become readily available to you and lenders. You may apply for your credit file through credit reporting bodies such as Equifax.com.au. Otherwise we are offering a credit report analysis service where you will receive:

  • a copy of your Comprehensive Credit Report

  • a short analysis of your credit report

and if necessary recommendations on products and/or services that you may be interested in based off your report commentary. At this stage we are charging $49.99 for this service.

If you are interested in this service please Inquire Now  

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