Comprehensive Credit Reporting – changes you need to know

The term ‘bad credit rating’ strikes fear into the heart of any borrower. A poor credit history can lead to you paying higher rates for a loan, or may even mean you are unable to get a loan at all until your history ‘expires’ (which may take up to seven years).

Until now, however, the only information lenders could access from Australia’s three Credit Reporting Bureaus (CRBs) were applications for credit, defaults and bankruptcies.

However, changes to Comprehensive Credit Reporting mean that Australia’s Big Four banks are now mandated to share all their customers’ credit and debt details with the CRBs.

NAB, Westpac, Commonwealth Bank and ANZ have already started sharing their customer credit information, and will complete this sharing of data by September this year.

This means if you bank with one of the Big Four, other lenders will be able to see all your:

• loan balances (car finance, store loans, mortgages and personal loans)
• credit card limits
• missed repayments (last two years)
• late repayments (last two years)
• credit limit breaches (last two years)
• directorships
• applications for credit
• credit defaults
• bankruptcies

Don’t think you are home free if you bank with a second-tier lender. Many non-Big Four banks are also voluntarily sharing various types of data with CRBs, including Citibank, HSBC and Bankwest.

As a result, your credit history has never been more important, as access to loans in the future will be impacted by all the above information.

Many Australians actually have credit facilities they didn’t know they had, or had forgotten about. This is particularly common with interest-free loans taken out at retail shops, or credit cards taken out for the purpose of getting frequent flyer points and other deals. Sometimes the debts are paid down to $0, but have not been closed.

You may be able to access your credit report for free here. You will need your Driver Licence and Medicare numbers.