You may have heard – amended laws making Comprehensive Credit Reporting (CCR) mandatory from 1 July 2021 were passed last month.
The changes aim to provide more protection for consumers – and allow greater access to their information.
You may be wondering about the details of CCR – and how it will affect your ability to borrow.
At Everalls Finance Broking, we believe in empowering people with the knowledge they need to make informed decisions about their borrowing.
So we thought we should break the details of CCR down – to ensure all our customers are across this important development.
What is Comprehensive Credit Reporting?
Comprehensive Credit Reporting (CCR) came into play in 2020.
Since it was introduced, banks and lenders report on your credit conduct every month. (This conduct goes back 2 years.)
So if you happened to miss a payment 18months ago – the lender may have reported that to the agency – and it will show up on your credit report.
This can mean the difference between great interest rates or much higher rates – because you may be viewed as credit impaired.
Your repayment history also determines your credit score. This can be a major factor in any borrowing you might need, whether it is a home or business loan or even a new phone plan!
How does Comprehensive Credit Reporting impact my borrowing power?
There are some protections currently in place around financial hardship being reported to the agency. This is especially the case given the situation around COVID, with deferred payments being in place for many borrowers.
It’s important to note, this prevention of disclosure of some information is only there if you talk to the bank and ensure they follow the process.
If you ever have any issues in being able to make a payment – for whatever reason – make sure you contact the lender. In 99% of cases they will listen and try to help you get back on track.
Making sure your broker has all of the information about your past credit history is also incredibly important.
How can I ensure a strong credit report?
Here are some tips and tricks to stay on track:
- Get in front of your credit report by going to equifax.com.au. They are the main credit reporting body in the country. You can now access your report for free 4 times a year.
- Join and get an Equifax membership, so every time your score changes or you have an enquiry you know about it. (Membership also means you can access your score. You don’t get this on your report.)
- If you can’t make a payment tell the lender – and defer it for a couple of weeks. That way your repayment doesn’t show as missed!
- If you’re in financial difficulty, tell your lender – and your broker. We can help you find a solution or advise on ways forward.
Have further questions about Comprehensive Credit Reporting?
Not all lenders are currently participating in this scheme – as they have time to implement the changes.
However from September 2022 – all large lenders will need to comply.
It is entirely likely that in the next few years your borrowing rate will be determined by your credit score and report, very much like it is in the USA.
If you’ve got something on your report that shouldn’t be there, reach out to us.
Everalls Finance Broking can refer you to a credit repair expert, who can assist with unfair or incorrect marks on your history.