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What is Comprehensive Credit Reporting?

Comprehensive Credit Reporting (CCR)  means that banks and lenders can now see more data in your credit report when deciding whether or not you’re able to repay a loan or other lines of credit.

Some context

Up until 2014, lenders had limited access to your credit history. They could only see whether you had any negative information ie. credit enquiries, overdue debts, defaults, bankruptcy etc on your credit report. This focus on negative actions made it harder for people with good credit to be seen as trustworthy borrowers since lenders only had access to limited information. 

Now, positive aspects of your credit report are being added to give banks and other lenders a bigger picture of your finances. 

The newest additions to your credit report

• The types of credit you’ve opened in the past five years

• Up to 24 months of repayment history

• Dates credit accounts were opened and closed

• The credit limits for credit cards and values of loans obtained

The benefit of lenders having a deeper understanding of your credit history means that they can make more informed decisions about your overall financial position. Having more certainty around your ability to pay back a loan could result in lower interest rates and better financial products. Still with us?

Note

CCR also allows borrowers with a strong repayment track record to gain better recognition from lenders based on their good behaviour. 

Is CCR officially in effect? 

Technically, CCR has been in place since 2014, but only recently became mandatory for Australia’s Big Four banks, who were required to share at least 50% of their data within 90 days of 1 July 2018. 

They now need to share 100% of their data within 90 days following 1 July 2019. This is part of a bigger push towards open banking in Australia, and Comprehensive Credit Reporting is just the first step.

Note

According to the Federal Government, “this measure will give lenders access to a deeper, richer set of data enabling them to better assess a borrower’s true credit position and their ability to pay a loan.” 

Is CCR a good thing for everyone?

Although CCR brings many benefits, it’s not sunshine and rainbows for everyone.

There is a chance that with CCR in full effect it could have a negative impact on your current credit scores, especially if repayments have not been made on time.

The best way to find out is to check your credit scores.

Will CCR affect my credit scores?

With more visibility into your repayment history and credit obtained, it’s more important than ever to maintain good financial habits. With great power comes great responsibility, right?

Here are a few best practices to keep in mind:  

1. Pay your bills on time. 

Automate, automate, automate! 

2. Don’t apply for credit that you know you can’t get.

Check your credit score on a frequent basis so you understand your borrowing power and can start to see what is impacting your score – either positively or negatively.

3. Keep your debt under control. 

We have an app for that.

 

…and that’s CCR in a nutshell. Good on you for getting this far! Keep an eye out for mentions of open banking in the news since this is only the beginning. 

Check your credit scores with Wisr

If you use your credit cards responsibly, you can certainly maintain good credit scores. Head to your dashboard now and see where you stand.

Your Scores
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Disclaimer: This article contains general information only, and is not general advice or personal advice. Wisr Services does not recommend any product or service discussed in this article. You must get your own financial, taxation, or legal advice, and understand any risks before considering whether a product or service discussed in this article may be appropriate for you. We have taken reasonable efforts to ensure that the information is accurate at the time of publishing, but the information is subject to change. We may not update the article to reflect any change.

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