The Australian Government passed legislation mandating Comprehensive Credit Reporting. This means, by the 1st of July 2018, the major banks are required to have at least 50% of their comprehensive consumer credit data ready for reporting. By 1st July 2019 they will be required to provide 100% of their comprehensive credit data

Some major Financiers have already begun reporting comprehensive data to the credit reporting bodies, so your credit score and credit report may have updated to reflect this new information

What is Comprehensive Credit Reporting?

Comprehensive Credit Reporting refers to additional information being provided to, and held by, Credit Reporting Bodies in Australia. Credit Reporting Bodies are companies that provide details about credit history to financiers such as Equifax, Dunn & Bradstreet and Experian.

Previously Australia had a negative reporting system. This meant consumer credit reports could only contain information such as credit enquiries (typically applications for credit e.g. a personal loan or credit card) and information from credit providers such as payment defaults and serious credit infringements.

Under a comprehensive credit reporting system positive data is able to be included on credit reports.  Most developed countries in the world operate under a comprehensive credit reporting system.

The positive data that can be included on credit reports includes account information such as the date an account was opened and closed, credit limit, type of credit account as well as 24 months repayment history. Repayment history information can only be provided by and shared with licenced credit providers – this doesn’t include telecommunications and utility companies. This means that if you make your repayments on time each month this good credit behaviour will be recorded on your credit report.

These changes allow licensed credit providers to access and use this comprehensive information in order to make more informed lending decisions.

What can you do to get yourself ready for these changes?

  1. Make sure you pay all your repayments on time

It might sound obvious but is more important than ever. With the introduction of the new legislation financiers can now report your repayment history for the last two years to your credit file. If a payment is over 14 days late this can now impact your credit score.

If you have a number of credit cards an option maybe to consider combining them to make keeping track of when payments are due easier or setting up direct debits and ask your financiers to send your bills via email rather than posting them in the mail.

  1. Check your credit history

Additional information about your credit accounts will now be included on your credit file. This means that financiers that you are approaching for finance will be able to see how many credit cards and other loans you have and the amount of credit you currently have against your name.

You can access your credit report for free. To find out more click here

  1. Correct any errors on your credit file

If you find an error on your credit file, take steps to ensure this is corrected. This is something you can generally do yourself, however sometimes serious matters like judgements and defaults will require the services of a specialised solicitor.