Comprehensive Credit Reporting (CCR). What is it and why should you care? 

CCR is the next big thing in credit scores. CCR has enabled Equifax’s new generation of credit scores to be fairer, more accurate and more transparent. The key change that CCR has brought about is that positive credit behaviour is now considered when assessing an individual’s credit-worthiness.

In March 2014, changes were put in place to start rolling-out a fairer credit reporting system known as Comprehensive Credit Reporting. But this was not widely adopted by credit providers. However, last year (2021) changes to the law made it mandatory for the four largest Australian banks to provide CCR to Equifax and other credit reporting bodies.

Credit reports and credit scores before these changes had limited data and only used ‘negative data’ to assess your credit-worthiness – how well you manage your credit commitments. This data would typically include information such as how many credit enquiries you have made or how many defaults you have.

Comprehensive Credit Reporting introduces more data that reflects positive behaviour.  The new system now includes:

  1. Credit account history: active or opened accounts, the date when you opened an account, the date when you closed an account and the maximum amount of credit available under each active account. It’ll also include basic information about each account, such as the terms & conditions and the name of the credit provider the account is with.

  2. Repayment history: your loan repayment history over a period of 2 years, including any late or defaulted repayments you may have received and the date you paid the default in full.

Top 12 questions we get asked about the new generation of Equifax credit scores.

Having positive data in your credit file is a great step forward for Australian consumers as it paints a fuller picture of you, the borrower. Having more data recorded on your credit report gives you greater power to positively impact your credit score. You can also build a credit history much faster.

You will now have more power to influence your new credit score.

More competition and better deals

As more data becomes available, lenders will have more information to determine your credit-worthiness. This is expected to ultimately drive market competition and result in lenders offering a better deal based on your unique circumstances. In short, you could be rewarded for a good credit score with a lower interest rate. 

While these changes are still taking place in the Australian financial market, it is not an entirely new concept. Comprehensive Credit Reporting is already common practice in the United States and the United Kingdom. We are simply catching up.

If it’s been a while since you’ve seen your score, look now and see how these changes have impacted you.

 Get your FREE Credit Score today to help you stay on top of your finances.

Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstances.