Do You Pay Your Bills On Time?
There is a legislative change proposed by the Australian Government regarding Comprehensive Credit Reporting (CCR) taking effect from 1st July 2018 that could impact you and your family.
The proposed CCR legislation will see the mandatory reporting of both positive and negative credit history from Australia’s largest financial institutions as “More comprehensive information sharing will increase the availability and affordability of credit to borrowers and allows lenders to make better credit risk decisions.”1
While only the four major banks (NAB, CBA, Westpac and ANZ) are required to share this data, other credit providers will likely also share data within the same time frame to remain competitive.
As such, as of now, your comprehensive information is probably being collected by your financial institution in the event that it needs to be reported to the credit reporting bodies as of 1st July 2018.
Your credit history currently includes:
- Credit enquiries (applications for consumer credit and credit contracts); and
- Negative information (significantly overdue accounts including defaults and serious credit infringements, and public record information).
However, the following new data will be included going forward:
- Repayment history for 2 years: for credit accounts such as credit cards, personal loans and mortgages (including whether the minimum payment was met & whether the payment was made on time)
- Consumer credit liability information: a list of credit accounts opened/closed (including dates), the name/s of the credit provider/s and the current credit limits of any accounts.
While it is likely that your credit score will change with data from Equifax showing “that generally, consumers with CCR data on their credit file will see improvements in their credit scores”, 2 if you are consistently unable to meet your credit obligations in a timely manner, this will appear negatively on your credit report and have subsequent flow-on affects in your ability to obtain credit in the future.
If you are suffering from cash flow issues, please contact your trusted team of local financial planners at Newcastle Financial Planning Group on 02 4032 7934 to receive support and identify a suitable strategy to guide you in the right direction.
References
https://www.arca.asn.au/news/industry-supports-federal-government-s-approach-that-ccr-is-a-vital-part-of-australia-s-economic-infrastructure.html1
https://treasury.gov.au/consultation/c2018-t256276/
https://www.moneysmart.gov.au/tools-and-resources/publications/factsheet-your-credit-report
https://www.smh.com.au/money/borrowing/theres-good-and-bad-in-comprehensive-credit-reporting-20171214-h04m8x.html
https://www.creditsmart.org.au/manage-your-credit-report/
https://www.finder.com.au/comprehensive-credit-reporting2