Positive Credit Reporting also known as Comprehensive Credit Reporting (CCR) is a reporting system whereby lenders share more of your data with credit bureaus such as Equifax and Experian. This in turn will be listed on your credit report.
In the past, the only information that was mandatory to share was Negative Credit Reporting. It wasn’t until 1st July 2018 when it was made compulsory for the big banks to share at least 50% of your positive credit data with credit bureaus. By 1st July 2019 this amount will be increased to 100%.
At this stage it’s only the big banks (CBA, Westpac, ANZ and NAB) who are required to share this data, although it’s likely that other credit providers will follow suit.
What is Negative Credit Reporting?
Negative credit reporting is the system Australia has used since 2014 and is based around sharing of negative credit information only. Lenders would base their assessments of a potential borrower solely on whether they had a negative credit history which displayed notices of missed repayments, defaults and bankruptcy for example.
Lenders could also access information regarding the history of credit related applications. They wouldn’t show the outcome of the applications though – if it was approved and accepted or if it was declined.
What is Positive Credit Reporting? (Comprehensive Credit Reporting)
Positive Credit Reporting in Australia will give lenders far more information and make it easier for them to perform comprehensive and balanced assessments based on your credit history. The credit report will include a full history and current summary of accounts held, when they were opened and closed, the date default notices were paid and whether repayments have been met.
Below is a summary of what is now included within the Comprehensive Credit Reports;
The positives from Positive Credit Reporting:
- All recent and past behaviour is registered – So if you’ve missed a bill in the past due to being on holiday or moving to a new house for example, but all repayments have been met since then, the slip-up from the past will be balanced by your recent hard work and discipline of keeping your accounts in check.
- Having a short credit history is no longer as big a risk – This is particularly relevant for first home buyers who don’t always have much of a credit history. Going forward, the lender will now potentially have more information on your credit file which is of relevance and may make it easier for lenders to provide credit.
- One negative event will likely not significantly impact your credit score – A negative event like a missed payment for example will likely not impact you as the credit reporting system will have records of all your repayment history for 24 months. If all other repayments have been met on time, then it’ll likely not impact your credit score.
- Credit scores will potentially become more accurate – All your efforts of meeting your credit repayments on time won’t go unnoticed as the credit reporting system will now have far more comprehensive information that isn’t just constructed using negative reporting data.
How can I access my credit report?
Regularly reviewing your credit score and understanding what impacts your score is crucial. Positive Credit Reporting will provide you with more transparency and can help you to understand what may be impacting your credit score so you can manage it better.
Your credit score will fall into one of five different bands with each band representing a level of credit-worthiness to the lender;
We recommend checking your credit score at least once a year, this can be done for free through Equifax Credit Report, who many lenders also use to view your credit file when applying for credit.
If you have any questions about anything that you’ve read, please don’t hesitate to contact one of the Seek Financial team. For your convenience, we can also assist you with a copy of your credit report.
The above information is general in nature. It has been prepared without taking into account your objectives, financial situation or needs.