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Comprehensive Credit Reporting: What is it?

Many of us pay our bills on time to avoid late fees and a bad credit rating.

But there’s been a big change recently which means you can now be rewarded for making timely repayments.

Towards the end of 2018, ANZ, NAB, Westpac and CBA all agreed to commence Comprehensive Credit Reporting (CCR).

It’s something that has been around since the middle of last year, but has taken a while for the larger lenders to get onboard.

CCR is seen as a more “positive” reporting system than the “negative” credit reporting system that has previously been in place.
 

So what exactly is CCR?

CCR will see the banks provide additional data to credit reporting bodies such as Experian, Illion and Equifax.

The data they’re now required to supply to these agencies include:

– The type of loan or credit account.

– When it was opened or closed.

– The credit limit.

– When payments were made on time.

– When payments were made 15 days late (as well as instances when payments were made 45 days late).

 

So how does this help your situation, as a borrower?

In years gone by, credit reporting bodies only heard about you when you messed up (i.e. when you made late repayments or defaulted on your debts).

Basically, this meant that banks, credit unions and lenders could only really assess your borrowing capacity on the negative aspects of your credit history.

However, now that CCR has been adopted by the major banks, your positive credit history, such as timely repayments, will be reported too.

This now gives your credit score the chance to go up – not just down.

“From our experience in the 19 other countries where we operate credit bureaus, positive data sharing is a much fairer system and provides consumers with better credit opportunities,” says Experian Australia’s Poli Konstantinidis.

“It doesn’t just help those with strong credit scores, it also means those without a long credit history, young first home buyers for example, can build one quicker than before.”
 

What do you do with this information?

Well, that’s simple. Make sure you’re paying all your bills on time!

Lenders have always investigated your financial history when they assess a loan application, but now they have a lot more information at their fingertips.

If you want a free copy of your own credit report (you can do so once a year from one of three national credit reporting bodies), there’s more information on how to do this here.

 

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