Mandatory Comprehensive Credit Reporting and what it means for you…

Mandatory Comprehensive Credit Reporting and what it means for you…

The Australian Government has proposed a change that mandates Comprehensive Credit Reporting (CCR) from 1st July 2018. Also known as positive credit reporting, the proposed CCR legislation mandates the reporting of positive, as well as negative, credit history – from Australia’s largest financial institutions.

So what does this change mean for you? Today your credit history includes credit enquiries (such as applications for consumer credit and credit contracts) and negative information (such as significantly overdue accounts, defaults, serious credit infringements and public record information). Essentially, previously your credit reports only held negative information such as missed payments or bankruptcies.

But the proposed change means that additional information, including account open dates, credit limits and up to 24 months of repayment history, will be supplied to our three credit reporting bodies, for all open consumer credit accounts. This means your credit report will now include information about the current accounts you hold, which accounts have been opened and closed, the date that you paid any default notices, and how well you meet your repayments.

It’s going to be all ‘out on the table’, so to speak. Arguably, this change is a good one – because your credit report will be more comprehensive and subsequently, will detail both the positives with the negatives (but hopefully, the negatives are few and far between!). This gives credit agencies a more inclusive view of your history – rather than essentially detailing only the undesirable aspects of your credit information.

But this also means it’s going to more important than ever to do the right thing. So how can you protect your credit history? It’s important to know that as of April 2018, banks have been recording your comprehensive credit information to comply with the changed legislation and report this to the credit reporting bodies from 1 July 2018. So it’s now more important than ever to pay your bills on time, because this will appear favourably on your credit report.