Comprehensive Credit Reporting (CCR) has become mandatory for all credit providers from July 1 2018, to provide a more balanced view of an applicant’s credit history.
In the past, lenders have used negative credit reporting, where they assessed a credit applicant based only on negative details such as court writs, judgement, defaults and so on.
Lenders will now be shown a broader view of a potential customer’s credit history, including information such as on-time repayments, repaying a loan early or closing unused accounts.
Depending on which side of the fence you sit on, this additional information may be beneficial for people securing finance and achieving a great rate.
However, the flipside is that if you are late paying a credit card, loan repayment or are continually overdrawn on your bank account, you may find it more difficult to achieve finance approval for a property.
The implementation of CCR was recommended by the Government in 2014, but was met with reluctance from major banks and lenders because it would mean the customer data they had gained would be made accessible to other lenders, potentially affecting their competitive advantage.
So, what does it mean for you?
As it is still early days, there is not enough data to understand how this is impacting on credit assessment.
Like all bank policy we know that some lenders will heavily rely on the data in determining your credit worthiness, whereas others will take a different approach.
If you would like to check your report and discuss your finance needs,
send Peard Finance a message here or phone (08) 9273 8900 today.