Borrowers get credit as reliable bill payers
HAVING a squeaky-clean credit history is about to put consumers in the driver’s seat and deliver them better deals.
Positive credit reporting or comprehensive reporting – which tracks a borrower’s ability to repay bills and pay debts on time – is being collected. It will enhance the cases of consumers making future applications for credit cards, loans and mortgages.
Previously only negative information has been collected.
New analysis by one of the nation’s largest credit reporting agencies, Experian, has found two in three people aren’t aware of the upside of credit providers collecting “positive data”.
Experian’s managing director in Australia/
New Zealand, Suzanne Steele, said the changes could result in those with clean credit histories getting better deals.
“Positive data will reward responsible borrowers. Lenders can think about your good behaviour and not just your bad in terms of managing your finances,” she said.
“It’s almost like a financial CV. It says how you behave as a borrower, so we think positive data should mean it’s more competitive in the marketplace because banks and lenders will see much more information about you as a consumer.”
Previously only negative information has been collected.
Lenders will be able to look back at the last two years of a person’s credit behaviour, including how many credit accounts are held, how well repayments are met and if any defaults were made.
Consumer finance expert Lisa Montgomery said people need to be “diligent with payments” to maximise the positive effects on future loan applications.
“Now every activity that you do in relation to a credit product – that even extends to your utilities and your bills, including your phone – can impact your ability to get finance,” she said.
“It will impact your ability to get a better deal (because) positive reporting will provide lenders with enough information to then be a little bit discerning about what they offer you.”
To check your credit file, go to getcreditscore.com.au.