From 1 July 2018, comprehensive credit reporting (CCR) became mandatory which means lenders now use a larger magnifying glass to pry into your credit history.

There are both winners and losers when it comes to home loan approval – which side are you on?

What is positive credit reporting?

Prior to the introduction of CCR or positive credit reporting in March 2014, Australia effectively operated under a “negative” credit reporting environment.

What that means is that credit agencies such as Equifax, which acquired Australia’s largest credit reporting bureau Veda Advantage, now record:

  • The date a credit account is opened.
  • Current limit on credit accounts.
  • The nature of the credit account.
  • The date a credit account is closed.
  • 24 months account payment history: Monthly repayment history will reflect whether you paid the minimum amount required on your financial commitments each month or not.
  • A “default”listing if your payment is late by 60 days or more and for amounts you owe that are over $150 (previously the amount was $100). It will still remain on your file for 5 years.

Repayment history data can only be provided by and shared with licensed credit providers so your information does not include telephone and utilities accounts.

Call us today on 1300 889 743 or fill in our free assessment form and we can you how positive credit reporting will affect you.

Can lenders see this new data on my credit file?

Yes!

The new information is also reflected in your Equifax Score (previously VedaScore).

Depending on the lender and the weighting they give to the Equifax Score, it also influences the way banks credit score.

Read our guide on credit scoring to discover how a credit score can make or break your application.

How is CCR reflected in my credit file?

You will find a lot of this new information, including your 24-month repayment histroy, under the heading ‘Consumer Credit Liability Information’.

If you have multiple accounts with the one lender, a separate table will appear for each account.

How will positive reporting help me qualify for a home loan?

Positive credit behaviour can help negate bad behaviour because it highlights both good and bad credit behaviour:

  • Quicker to establish a credit report: This is great for first home buyer or a new migrant to Australia that needs to build their credit profile before applying for a home loan.
  • More balanced system for everyone: It rewards the good and gives people who have had credit problems in the past a second chance.
  • Access to better home loan deals: Australians who previously fell into the “bad credit” category now have the chance to get a better interest rate.
  • Cut down on application time: Positive credit reporting reduces the amount of paperwork applicants need to provide because lenders can collect this information from the credit bureau.

CCR allows you to recover faster from financial adversity and rebuild your credit profile.

How can CCR work against you?

Depending on the lender you apply with and the amount that you borrow, your Equifax Score can be dragged down by positive credit reporting.

How?

If, for example, you only have a small amount of debt but you’re not keeping up with your repayments, a greater consideration will be given to your Equifax Score when borrowing at a higher Loan to Value Ratio, which is typically anything over 90% of the property value.

Under the new rules, you could be hit on two fronts by being flagged for multiple credit enquiries and an unreliable repayment history, dragging your Equifax Score down even lower.

Any credit limit increases you apply for are now also included in your credit history, suggesting that you are having trouble managing your finances.

What hasn’t changed?

The following information will still be recorded on your credit file and have an impact on your Equifax Score: