The Australian credit market is among the most interesting in the world as it remains among the most robust and active. While credit markets elsewhere in the globe dips into troubled territories, credit market in here have remained robust.
According to the Reserve Bank of Australia (RBA), the national financial system exhibits an extraordinary and plausible resilience. This is despite the recent and current strains in financial and credit markets around the world. Furthermore, there has always been favourable outlook for the country’s economy. Thus, analysts and observers easily agree that the financial and credit system across Australia is in much better position despite difficulties. Having said this the credit providers have tightened their lending policies significantly which is why any form of negative items recorded on a credit file remain to be such an issue for people who are trying to secure credit, even one small listing such as a payment default can stop people in their tracks when trying to secure credit, this is why credit repair companies such as Clean Credit are so important in today economic environment.
Australian banks have been exhibiting significant strength in the past several years, despite global economic pressure. Major lenders have logically increased provisions especially for bad debts amid exposure to huge short-term refinancing requirements. Mortgage arrears are controllably rising, which is not unique to the country. As mentioned above however, a clean credit file is of paramount importance for people securing credit according to Clean Credit.
In good shape
The RBA is confident that the Australian credit market has been and would remain in good shape. The country’s central bank has pointed out several factors that could have contributed to this. First, the domestic banking system has remained well capitalised and highly profitable, which has been a real challenge during the past trying times when global economy was tested.
It helped that Australian credit market, particularly the banking industry, had minimal exposure to recent financial problems in other countries. Local banks have been especially applauded when it exhibited resilience and immunity over the previous sub-prime woes in the US.
Stable and strong
Credit ratings in Australia remain stable and strong. Lenders’ credit ratings may have been cut by major credit rating agencies, but such downgrades are minimal. Australian banks remain among the highest ranking worldwide. The downgrades are also easily countered by the subsequent upgrades, which help maintain investor and depositor confidence high enough to keep the credit and banking market in the country afloat.
Thus, it is not surprising that despite the global financial woes, deposits in Australian banks continue to increase strongly. This is logically ideal for the Australian credit market. Lenders continue to raise huge volumes of funds in domestic as well as in international capital markets.
Moreover, Australian credit market also benefits from the fact that banks possess less risky portfolios compared to their counterparts globally. This helps make sure credit would remain ideal. Thus, financial ratios of the banking industry are kept robust. Ratios like non-performing loans to overall loans are within low levels. Arrear rates are on the way to decline.
The credit reporting challenge in today’s market.
Many credit providers are using credit files as a means of culling loan applications. This is why even a seemingly small credit listing such a payment default to a phone company can course people so much trouble. According to Clean Credit, many negative credit listings such as defaults can be removed from a credit file, this process is known as credit repair. In today’s financial market having a clean credit file and improving a credit score is imperative for securing credit.
Clean Credit Pty Ltd
1300 015 210