Comprehensive credit reporting (CCR) became fully mandatory in Australia from July 2018, 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 comprehensive credit reporting?

Prior to the introduction of comprehensive credit reporting (CCR), Australia effectively operated under a “negative” credit reporting environment.

Which essentially meant only adverse credit events such as defaults and judgements showed up on your credit file.

However, with the implementation of CCR, banks are now required to share more information about the type of credit products you hold and your repayment history to credit reporting bureaus.

As a result, it provided a more complete and holistic picture of your credit history.

What new information is shared under the CCR?

New information that is shared with the credit reporting bureaus under positive credit reporting are:

  • The financial institution where the account is held – NAB, Westpac etc.
  • The nature of the credit account – Personal loan, home loan, overdraft or credit card.
  • The date a credit account is opened and closed.
  • Current limit on credit accounts.
  • 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” is listed, 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 utility accounts.

Call us today on 1300 889 743 or fill in our free assessment form, to find out how to use positive credit reporting to benefit you.


Can lenders see this new data on my credit file?

Yes!

The new information is 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 history, under the heading ‘Consumer Credit Liability Information’.

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

To get a free copy of your credit report, contact one of the three credit reporting bureaus directly.

They are:

  • Illion
  • Experian Australia Credit Services
  • Equifax (Previously Veda Advantage)

You’re entitled to a free credit report within ten days of the request:

  • Once every 12 months;
  • If your credit application was declined. You must request a copy within 90 days from the date your application was declined; or
  • If you’ve lodged a correction request and has been advised that your credit report has been fixed.

Comprehensive credit reporting – Undisclosed debts

The major banks have started using the comprehensive credit reporting information provided on a borrower’s credit report to assist with the home loan application process, specifically in relation to undisclosed debts.

Basically, the banks are cross-checking this new information against loan applications to see if there are other financial institutions where credit card, overdraft, personal and home loan accounts:

  • have not been listed on the statement of position for a loan application; or
  • have limits or amounts owing that are misrepresented on the statement of position.

When applying for a home loan:

  • If there’s an undisclosed account that will be paid out with the proceeds of the loan being applied for – provide the necessary documentation and note it accordingly in your application.
  • If an incorrect credit limit is present on your credit report – obtain evidence of the correct amount such as your current account statement.
  • If an incorrect loan (personal loan/ home loan) amount is present – obtain evidence of the correct amount such as your home loan or personal account statement.

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 buyers or new migrants 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 number of paperwork applicants needs 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?

For example, if 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 (LVR), which is typically anything over 90% of the property value.

Under the new rules, you’re 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: