Budget 2017: Will open data improve credit score usage in Australia?

Posted: 15 May 2017 11:55 am
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The government's plan for open data could push Australians to take full advantage of their credit scores.

Proposals to open up access to banking data in Budget 2017 could make Australians much savvier in their use of credit scores, but research suggests most Australians aren't savvy enough to take advantage of the changes.

A key plank of the banking reforms proposed in the budget is giving Australians broader access to the information held about them by financial institutions.

"The Government will increase consumer choice and improve competition in banking by giving customers access to and control over their banking data by introducing an open banking regime in Australia," the budget papers note.

"Increased access to data will improve the information available to consumers and better enable innovative business models to create new products tailored to individuals."

An independent review will make recommendations by the end of the year to fast-track the process.

Broader access to data could help Australians make more intelligent use of their credit score and identify areas where they could improve their credit rating. While banks have been "open" to open data, not all lenders are participating in all aspects of it, such as the comprehensive credit reporting regime.

However, broader access to data and encouraging Australians to make more intelligent use of the credit position will require overcoming the current apathy and ignorance around credit scores.

A finder survey found that 1 in 4 Australians don't know how to find out their credit score, and a worrying 12.3% of Australians don't know what a credit score is.

For open data to deliver its full potential, that attitude will have to change.

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