October 1st, 2019
Lenders now have access to more information than ever about your clients’ credit history. In this article, we’ll break down what Comprehensive Credit Reporting is and the impact it might have.
What is Comprehensive Credit Reporting (CCR)?
Credit bureaus compile credit reports based on feedback about credit behaviour from banks and other credit providers. Credit reports contain a credit rating between zero and 1200 as a measure of creditworthiness.
CCR is the information that lenders can access via credit rating agencies about your clients’ credit history. The introduction of CCR changed the type of consumer credit information that can be collected and reported. Previously, Australia only had a negative credit reporting system but now this includes positive information.
This includes whether your clients’ have a mortgage, mortgage repayment history going back two years, credit card limits and repayment history, and repayment history on car or personal loans.
It is now mandatory for the big four banks to use CCR more fully and apply it when making credit assessments. It is still optional for smaller banks and other lenders.
Who does this impact?
In short, this impacts all eligible consumer credit accounts. These are accounts which provide or can provide consumer credit such as home loans, personal loans, car loans, credit cards and overdrafts.
In the past month around four million mortgage accounts were fed in, that’s about 80 per cent of all mortgages in Australia. 15 million credit cards, or 60 per cent of all cards, have been reported.
Following the initial bulk supply of information, the big four banks must continue to keep the information up to date.
How does it impact your clients?
Therefore, if your customers have a good credit history – they’re paying down their mortgage, haven’t missed a payment on their car loan and their credit cards are under control – you might be able to demand a better deal on interest rates, or shop around armed with their data.
What can your clients do to ensure a strong credit report?
How to download a credit report?
Request a copy from a credit reporting body like Equifax, illion or Experian.