Since March of this year, a new credit reporting system has been set in place by the Australian Government. This new system is known as the Comprehensive Credit Reporting system and it changes the manner in which lenders and financial organisations assess risks when acquiring new clients.
Comprehensive Credit Reporting in Australia
Before this comprehensive credit reporting was put in place, the credit file or rather the credit history of a person was largely confidential. The detailed financial history of a person was governed by the Privacy Act. Lending and financial institutions could only access very little negative information like bankruptcies and defaults. With the new comprehensive credit reporting system, lenders and financial institutions will be able to access a much wider range of information.
From now on, lenders will be able to get credit card details and personal loan details too from the credit file of a person. This information includes repayment history and monthly billing details. However, such detailed information will only be shared with lenders and credit providers and not with utility companies or telecommunications companies.
The changes in the credit reporting system and the introduction of the comprehensive credit reporting system aims to bring a clear picture of consumers to lenders. Lenders need to know the financial health and spending behaviour of clients before making important credit decisions.
The Importance of Having a Clean Credit History
In this new system, lenders will have all the information they need about your monthly bills and repayment behaviour, as well as your credit history. Missed repayments by more than five days will be recorded in your credit file, but a default will not be recorded just because a repayment has been missed.
So you will need to ensure that your credit history and credit file is clean. More information is being collected and therefore borrowers need to be more careful about their repayments. This new system could make Australians more vigilant, as many people right now never keep track of their credit files and histories.
If you are looking to take out a loan, mortgage or credit card, you need to make sure that your credit history is clean. A suspicious and unstable bill repayment record can cause lenders to distrust you, which could lead to your application being rejected or high interest rates. Repairing your credit rating could make you a much more attractive candidate to lenders when it comes to loans and mortgages. This could lead to better loan terms, lower interest rates and more financial options.
If you want to learn more about the new comprehensive credit reporting system or want to enquire about how you could repair your credit score then call Clean Credit now on 1300 015 210 or enquire online.