What is CCR?
CCR - Comprehensive Credit Reporting
Comprehensive Credit Reporting (also known as positive credit reporting) is the new way your credit information from numerous financial institutions must be reported to the credit bureaus in Australia.
Previously, Australia's credit bureaus (such as Equifax, Experian and Illion) only received and recorded negative credit information about you. This included events such as:
- Missed loan / credit card payments
- Missed bills
In 2014 however, the Government legislated that Australia must change and move to comprehensive credit reporting or CCR.
It then imposed two deadlines for the big 4 banks as they were taking too long to implement the CCR. By July 2018 they must be reporting 50% of their credit data to the bureaus, and this must increase to 100% by July 2019.
Why is CCR better than negative reporting?
Comprehensive Credit Reporting makes it easier for a person to show how responsible they are with their finances, plus it provides a fairer picture of their borrowing worthiness to lenders.
Therefore, implementing it is considered a positive step for all parties.
For borrowers, any positive payment behaviour that is reported should help offset any negative records such as missed payments.
In other words their credit rating or score should not be impacted significantly by one negative event, as would have happened during the negative reporting system.
For lenders, they will now be able to assess the borrowers risk more efficiently by seeing how well they meet their repayment commitments. This will also help them lend more responsibly.
What information will the CCR now include?
Comprehensive Credit Reporting will now allow financial institutions to report and share the additional information of:
- The dates accounts are opened and closed
- Credit limits
- Types of credit accounts held
- Up to 24 months of repayment history*
*repayment information can only be provided by and shared with licenced credit providers - this doesn’t include telco and utility companies.
How can this information benefit me?
This positive information can benefit people who are consistent and reliable with paying their bills and loans on time, as it can help further improve their credit rating as well as their ability to obtain cheaper finance, if available.
Also, it will be able to help people who've had a few hiccups (such as missing one or two payments) be approved for a loan - where as previously they may have been declined.
Additionally, with having access to more positive information, a lender will now be able to determine more reliably:
- If they can lend to you
- How much they can lend to you
- If your interest rate or loan terms can be influenced more favourably - i.e. reward you for your good repayment history
Is Fair Go Finance implementing CCR?
Yes, Fair Go Finance will start supplying all of our customers' repayment data by mid 2019. We will be in contact with all of our customers to advise when this officially begins.
As a responsible lender, we believe comprehensive credit reporting will help improve the borrowing power of our customers with good repayment conduct and positively support those who've had credit issues in the past, but who are now committed to repairing their credit history.
We hope this blog has helped to explain what the CCR is and how its changes can affect you as a borrower. We will also provide more information about the CCR prior to implementing it.
If you have any questions about this blog, please feel free to contact us - we're here to help.