Equifax data shows Aussies will be better off under new credit rules
Comprehensive credit reporting means higher credit scores and will give more Australians access to credit.
The most recent Equifax data has shown that Australians are likely to be better off under the comprehensive credit reporting (CCR) regime, which the Big Four banks have been mandated to participate in from July 2018. While only 27% of financial services accounts currently have CCR data loaded, Equifax shows that these 5.59 million Australian accounts are overall better off under the new rules.
CCR has created positive credit history for 980,000 Australians that previously had no credit history, for example. And in the case of those that already had a credit history, it's likely to improve.
For Australians that have applied for credit in the past three months, those with CCR data in their credit files have a higher average credit score. "This illustrates how CCR data provides a more accurate reflection of a consumer's creditworthiness," said Equifax in its State of the Industry report.
While CCR was announced back in March 2014, the uptake has been incredibly slow. The government repeatedly called on banks to participate in the regime, but it wasn't until 2 November 2017 that Federal Treasurer Scott Morrison announced that it will be mandated.
The Big Four banks will be required to share 50% of their credit data by 1 July 2018, moving up to 100% 12 months later. While only the Big Four banks have been made to participate, Morrison says the competitive landscape this creates will lead other lenders to follow suit.
If these figures from Equifax are anything to go by, the move to comprehensive credit reporting will be a win for consumers. You can get your credit score for free with finder and receive an updated score every six months to monitor how it changes as CCR is rolled out.