Haven’t heard of Comprehensive Credit Reporting (CCR)? Never checked your credit score? Well, now is the time to do so! Why? Because your credit information will now be shared with Australia’s credit bureaus.
“Under the new CCR system, when you apply for credit, authorised lenders will have access to up to 2 years of your repayment history, along with detailed information of your credit accounts.”
First off, you might wonder how this additional information can affect you and your score? Or help you as a borrower? These are the burning questions we know you want to find out, so without further ado, let’s dive into the key benefits of CCR and how this data can play a part next time you apply for credit.
You will be assessed under a more balanced credit reporting system
By incorporating both ‘negative’ and ‘positive’ information, a more comprehensive picture of your credit health brings greater transparency to lending decisions and can lead you to access quality credit where you may not have been able to previously.
Your good credit behaviour will be rewarded
Historically, credit bureaus in Australia have not had access to your repayment history or detailed information about your credit accounts so they haven’t been able to take your complete credit information into account.
With this shift in focus to recognise positive credit behaviour, if you already and continue to make your repayments in full and on time, you can now expect to see that plus reflected on your file and credit score.
You can potentially access better rates or deals
A healthy credit score can potentially grant you access to more competitive rates or deals. Credit providers will also be able to tailor products better to suit your needs and credit history.
You can recover from adverse events faster
More detailed data sharing can help identify credit stress at an early stage before it becomes unmanageable and it will take a general pattern of credit stress to impact your credit reputation instead from a single negative event.
If you have made all required payments on time, previous negative slip-ups such as a missed payment that was registered on your file a year ago may be balanced out if you continue to demonstrate positive credit behaviour.
You can establish your credit report quicker
If you have a thin file or you are new to credit, you may be able to establish your credit report quicker with this extra information being registered on your file.
CCR will give you more power to demonstrate credit worthiness and the ability to manage your credit reputation.
You will see changes in your credit score
Your credit score is dynamic and can change from month to month, especially with this extra information being added to your credit file. Your credit score will most likely change as a result of CCR, so it’s more important than ever to monitor your score.
This article was originally published on Credit Savvy.