Some things to note about Comprehensive Credit Reporting

The most significant feature of the comprehensive credit reporting system is the inclusion of more comprehensive information within the system, and the consumer protections that control the access, use and disclosure of this information.

This means that although more of your information may be available to your credit providers, you also have more rights under the law and credit providers, credit reporting bodies and other organisations that are permitted to exchange and handle credit information are subject to more obligations

What are the expected benefits of comprehensive credit reporting ?

  • A clearer picture: A more complete picture of your ability to repay your debts, will enable credit providers to make more accurate and better informed lending decisions. 
  • Better matching of credit to your needs: Credit providers can better match the terms and amount of credit to your circumstances. This may reduce the risk that you commit to repay more credit than you can afford.
  • Fairer access to credit: Credit providers decide whether to lend money based partly on the information contained in credit reports. For those with a limited history of borrowing, such as young people, this may reduce their chance of getting credit as they have a limited history.  With comprehensive credit reporting , there will be more information in credit reports to better help credit providers make a decision when applying for consumer credit.
  • Increased consumer protection: The comprehensive credit reporting system gives you more control over the information in your credit report. For example:
    • credit providers and credit reporting bodies are obliged to take positive steps to help you get incorrect information in your credit report fixed. If your correction request is not resolved, you can access internal and external dispute resolution processes  
    • credit providers and credit reporting bodies must respond to complaints within set time periods, and if a complaint remains unresolved or the response is unsatisfactory, the complaint can be referred to an external dispute resolution scheme or to the Privacy Commissioner
    • credit providers risk very significant fines if they misuse the information in your credit report 
    • credit providers cannot use information in credit reports to market products and services
    • you have more options to help protect your personal and credit information if you have been, or may be, the victim of identity theft or fraud.
  • Minimum default amount increase: The minimum default amount that can be included on your credit report has increased from $100 to $150.

What are some of the potential disadvantages?

  • You may not receive credit when previously you would have been approved: The new information on your credit report will contribute to a clearer picture of your current financial situation, so credit providers may be able to see if some people have more credit than they can afford. A poor credit history will be more obvious.
  • Late or missed payments may show up on your credit report : Previously, rather than a late payment appearing on your report, only a default or a serious credit infringement could appear on your report. In addition, your report would include information about applications for credit (but not the outcome of the application), court judgements or bankruptcy and credit enquiries (that is, which organisation had accessed your report). 
  • These changes will take time: Some credit providers don’t use credit reports at all to make their credit decisions. Others will continue to use the current ‘negative’ credit reporting system. Credit providers that hold an Australian credit licence may adopt comprehensive credit reporting , but may do so at different times.