Positive Credit reporting. Have you heard of it? Is it important?
In November 2017 the government announced that it would legislate for a mandatory comprehensive credit reporting regime to come into affect by 1st July 2018, it would require the big four banks to participate fully in the credit reporting system.
What does this mean? Well it means that by now if you hold a mortgage, personal loan, car loan, credit card or any type of lending product by one of the major four banks you would have received a letter explaining the new changes. Currently banks need to report the date an application was lodged, the amount of credit requested, credit defaults and court judgments.
Why does this matter and how will it affect you? This will play a major role in your ability to secure a better deal on your mortgage, your personal loan or business loan. It will give the banks and lenders a better understanding on how you conduct your finances and when loan accounts where opened or if they are currently active and report credit limits. Account history is also a major change with the introduction of 24 months repayment history now being reported on the credit file.
If you are one to always pay your loan commitments on time there is nothing to worry but if you still use the manual payment options now is a good time to make the switch to automated payments. Don’t worry it’s easier than you think and in most cases a phone call to your lender and having your BSB & Account numbers ready is all that you need to do.
For now the government is only mandating the major four banks to participate in positive credit reporting but it has not ruled out extending this regime to other institutions to participate including gas, electricity and phone service providers. Though this doesn’t stop other financial institutions to voluntarily participate.
As a finance broker we are already starting to see Positive Credit Reporting come through on credit reports and while it is new to us here in Australian our friends across the Tasman sea have had it for eights years. We are excited to see some positive outcomes for our customers.
Stay tuned for our next mini blog post.
Mario De Contreras – Smart Hound Loans