Australians Need To Understand The Impact Of Their Credit History

Post by Sharat on June 21, 2018 · Under News · Comments Off on Australians Need To Understand The Impact Of Their Credit History 

Many Aussies simply have no understanding of the term credit history. However, it is critical that they do because it determines the access you have to credit which means it could impact everything from the homes you wish to purchase or the holidays you wish to take. This means you should take the time to better understand it. According to recent polls, as many as 60 per cent of all Australians have never checked their credit report and 30% don’t know there is a difference between their credit score and credit report.

Comprehensive Credit Reporting Scheme starts next month

It is not long before Australian financial institutions will be required to share customer credit history with the Comprehensive Credit Reporting Scheme kicking in on July 1st. Australians need to treat their credit report as an asset experts say.  This is all the more important in the light of CCR where both negative and positive history will now be considered by potential lenders. Usually there is a negative relationship between a borrower and their credit report. New research suggests that 15% of Australians say they have been denied credit as a result of their credit report.

CCR will force lenders to provide a complete profile of a borrower

Under the present system, lenders are not required to provide a full picture of a borrower’s credit history which means that such reports are only made up of negative aspects of their history such as defaults. This is set to change on July 1st where all lenders will be required to provide a full picture of the borrower’s history and provide both negative and positive information. This means reporting whether borrowers make payments on time and in full for products such as personal loans and credit cards. This will help younger borrowers or people who don’t have much history to obtain credit.

Good behaviour will be rewarded

Under the new scheme credit history will be far more comprehensive and transparent and this means smaller lenders will be able to provide credit to borrowers who have a good profile at more competitive rates. In most developed country’s consumers who make their repayments on time and in full can leverage that good behaviour to access lower cost financing. This means the new scheme will allow Australians to enjoy the benefits of competition between banks. The mindset will change from where is the nearest branch, to one where the consumer seeks out the best value loan.

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