A new system of Credit Reporting known as Comprehensive Credit Reporting or Positive Credit Reporting has been mandated by the Australian government and is set to begin rolling throughout 2018. The roll out will see the Big Four being required to provide 50% of their comprehensive credit reporting data to credit reporting bodies by the 1st of July 2018, with the remaining 50% needing to be ready for reporting bodies by the 1st of July 2019. This roll out will see all other financial institutions following in the Big Fours footsteps.
So, what is comprehensive credit reporting?
It is a method that provide credit reporting bodies greater, and more in-depth data that credit providers hold on their clients. Things that will be provided include;
- Dates that accounts or loans were opened or closed
- The type of credit facility, i.e. credit card, personal loan, home loan etc.
- The credit limit, and balance owing on credit facilities
- Current repayment history, including any late or missed payments, and if you have overdrawn your limit etc.
Previously in Australia the system of Credit Reporting used was what is known as ‘Negative Credit Reporting’. This style of reporting only gives credit reporting agencies access to information such as credit enquiries, defaults and other serious credit infringements.
These changes mean the average Australian must now be more active in ensuring their credit report remains as healthy and positive as possible. Listed below are some tips to keep your file healthy into the future.
- Pay your bills & loans on time – consider setting up direct debits and reminders of when bills fall due, so you don’t risk any late payments.
- Keep track of your spending on credit facilities – ensure you know what your credit limits and balances are and do not go over your approved credit limit.
- Limit the Enquiries against your credit file – when shopping around for the best loan or credit card don’t lodge multiple applications before choosing a lender. Each application you lodge will trigger a credit enquiry and in turn affect your credit score.
- Get a copy of your Credit Report – Ensure that the information contained on your credit report is accurate and enquire about anything that you don’t believe is true.
- Set up Credit Alerts – Some credit reporting bodies like Equifax (formerly Veda) will allow you to setup a credit alert on your credit file to alert you of any new information held on you. This will not only allow you to know your credit health but help you to monitor against potential fraudulent activity against you.
- Having Trouble meeting repayments – if you find yourself in financial difficulty you should speak to the credit provider. Most credit providers will have a dedicated team that can help if you find yourself in trouble.
So don’t let yourself get caught out with the new changes coming. Start taking action now to ensure your Credit Report stays healthy, and doesn’t impact your financial future.