There is no denying that credit plays a massive role in the lives of many different Australians. In fact, around 80% of Australians currently use some form of credit products. Nowadays, the most common forms of credit are home loans, credit cards, vehicle finances, personal loans, and Buy Now Pay Later options.
In the past, however, displaying positive lending behaviours (avoiding paying the minimum balance on credit cards, having a good credit utilisation ratio, and making repayments on time) was not visible to lenders, making it really difficult to get a loan approved if you had a mid-low credit score.
So now that it is in effect, it’s important to know how to take advantage of comprehensive credit reporting. This article will have all of the information you need. First of all, let’s understand what a credit report is and how it works.
How Do Credit Reports Work?
When trying to find out how to take advantage of comprehensive credit reporting, you must first gain an understanding of how credit reports work. This document is a record of your credit history and lenders will check it when you apply for credit to help them make a decision on whether to approve or decline your request.
Your credit report will tell lenders everything they need to know such as:
- Your repayment history
- How many times you’ve applied for credit
- Loans that were approved
- How much debt you have
- Any defaults
Credit reporting bodies will often condense your report into a credit score. This will assess your creditworthiness and makes it easy for lenders to figure out who they should lend to. Your credit score has a significant impact on a number of things including:
- Whether or not you can be trusted to borrow money in the first place
- The amount you’d like to borrow
- The interest rate that you will receive
- The fees /costs of taking out a loan
- Whether the loan will be secured or unsecured.
What Is Comprehensive Credit Reporting?
With the intent to provide a clearer picture of your credit history, comprehensive credit reporting was introduced in Australia fairly recently. It provides a greater level of transparency, allowing you to understand more about what you’re seeing. It also generally makes it far easier for people to get a loan or form of credit (although sometimes this isn’t the case).
Before CCR went live, your credit report only displayed what is seen as bad credit behaviours. Bad behaviour includes bankruptcies, defaults, and other credit infringements. However, comprehensive credit reporting means that positive information is now also displayed.
Now, positive behaviours within your credit history are also showcased, as well as the types of finance products that you have utilised. So, credit providers are now able to see if you are able to manage your debt responsibly.
Your positive history will certainly count towards your overall creditworthiness. This will show if you have been paying off your forms of credit and loans on time. If you are able to manage your debt in a pro-active way then it will look great on your report.
Credit providers will also be able to check if you have applied for a form of credit that is right for you. Even better, your unique circumstances will be kept in mind. This can lead to an offer from there that is better for you than the first form of credit you chose to apply for.
How You Can Benefit from Comprehensive Credit Reporting
When it comes to how you can benefit from comprehensive credit reporting, you will be amazed. Having access to a more detailed, fairer, and transparent score, you can enjoy many things. It means that you can:
- Ensure that your information is up-to-date and complete for lenders to review.
- Know which information is accessed and used by lenders throughout Australia.
- Access information that allows you to learn how you can improve your credit score.
- Understand why your score may be going up or down.
When you have access to information like this, it becomes more accessible than ever before to improve your score. You can do it faster and gain more control. It can also help you control your reputation as a borrower.
How to Take Advantage of Comprehensive Credit Reporting
Now that you know more about it, do you want to know how to take advantage of comprehensive credit reporting? If your answer is yes, you have come to the right place. Let’s take a look at some of the best ways how to take advantage of comprehensive credit reporting.
- Pay for electronics, such as a new TV on your credit card and pay it off in full immediately.
- Pay for your fuel on your credit card and pay it off immediately.
- Ensure that you never miss any repayments.
- Avoid only making minimum repayments towards your credit card balance each month.
- Pay off any outstanding balances.
These are some of the top ways how to take advantage of comprehensive credit reporting. These tips can make a massive difference to your creditworthiness. Keep them in mind!
Start improving your credit file!
Now that you have a good understanding of what comprehensive credit reporting is and how to take advantage of comprehensive credit reporting, you can start to use it to your advantage! If you need help with your credit report for any reason, get in touch with the friendly team at Clean Credit today!