Better bank deals ahead
DILIGENT: Matt Jordan is careful when to save and when to splurge and believes he will benefit from positive reporting. Picture: RICHARD DOBSON AUSTRALIANS are ready to hand over their data for a better deal on financial products, new research has shown, as the Federal Government considers action on positive credit reporting.
A Lonergan Research survey of 1037 adults commissioned by Getcreditscore.com.au revealed nine in 10 respondents want more competition between lenders and 84 per cent would request their bank provide their information to other lenders to improve their chances of being approved for a loan or securing a better interest rate.
Meanwhile, 85 per cent of Australians have already allowed businesses to access their personal data in order to receive better deals; just not in the finance field. It makes sense that finance should follow suit, believes Luke Keller, head of Getcreditscore.com.au.
“It’s like car insurance. If you have a good driver history you pay a lower premium and that’s the way we want the lending system to go,” Mr Keller said.
“Positive credit reporting should empower the consumer.
“If you do the right thing every month your credit score will improve.”
Positive credit reporting was introduced in Australia in 2014, so consumers would be rewarded for paying bills on time and borrowing responsibly, rather than only being punished for negative aspects like missing a payment or having multiple credit inquiries.
“However, it is not compulsory and banks have been slow to adapt, which may explain why less than 15 per cent of adults know what it is.
The most recent Federal Budget announcement, however, signalled a change in the works.
“Scott Morrison said that if there was not a 40 per cent uptake by the end of 2017, they would draft up mandatory legislation,” Mr Keller said.
“We see this as a win for all Australians. It will drive more competition, as there is more data on an individual and young people can build a credit file faster.”
One of those young people is 25-year-old professional Matt Jordan, a keen budgeter who has been diligently using a credit card since his university days. He initially decided to check his credit score to establish a good financial standing. Since then, he has endeavoured to stay on top of his rating.
“I check it every couple of months and just monitor as I go,” he said. “Every couple of years I try to get a comprehensive Veda report.
“Positive reporting would be ideal, especially for someone younger who doesn’t have a long line of credit.”