In just over three weeks, the big changes ahead will have a big impact on the next time you apply for a personal loan, mortgage or credit card-and most people don't know it at all.
Starting next month, banks will be forced to adopt a comprehensive credit reporting (comprehensive credit reporting,CCR, which means banks will be forced to share their customers' positive and negative financial records with other banks.
At present, most lenders only share negative information, such as credit applications, defaults, late payments, bankruptcy and court decisions. Under the new system, they will also have to share positive information, such as when you pay back on time.
Daniel, chief executive of peer-to-peer lender RateSetter. "the introduction of mandatory positive information means that regular payments, early repayment of loans or closure of historical records of unused accounts can help borrowers prove their credibility," said Fogg (Daniel Foggo). And finally get better deals from lenders. "
Strictly speaking, CCR has been in existence since 2014, but since the four big banks refused to participate, Finance Minister Morrison (Scott Morrison) was forced to enforce CCR. from July 1, 2018
Fogg said the new rules could allow most borrowers to see their credit scores increase as financial institutions share more information with Dun & Bradstreet,Veda and Experian, the three major credit reporting agencies.
Most people have credit scores ranging from 300 to 750, and the higher the score, the better. It gives you more leverage to negotiate better deals with banks, telecoms companies, insurance companies and utilities. Consumers with low scores may find it difficult to get credit, or they may be charged higher interest rates.
"with the introduction of comprehensive data, we expect most people's credit ratings to actually improve," Fogg said.
"the current credit profile is thin, meaning that ratings are often at greater risk because there is not much information to use. If we use early anecdotal evidence from Australia and draw on the experience of UK lenders, we can foresee an increase in credit ratings for most people. "
RateSetter has adopted CCR. It estimates that people with a credit rating of 500 and a rating of 800 could have a one-year interest difference of up to 5 percent for unsecured loans.
The 31-year-old Sydney woman Gueno. As a result of her good record, she saved about 2500 yuan on a car loan because of the low interest rates she received, Ms. (Gaynor McTaggert) said. "I initially applied for 10, 000 yuan in personal loans and soon paid off," she said.
"then I borrowed another 15000 yuan of personal loan to buy a car, because I have a reliable credit record, so the interest rate is very low. I can borrow a bigger loan and pay it off in a shorter time. "
To make the most of the CCR system, the most important thing people can do is pay their bills on time. But according to a survey commissioned by the RateSetter, 2/3 of Australians do not know the new rules are coming into effect.
The proportion of women who know the new rule is significantly lower, with only 25% of women knowing it, compared with 40% of men. However, 30 percent of those familiar with the changes said it would actively change the way they manage their finances, and they are more motivated to pay their bills on time and repay their loans on time.
Matagot says she didn't realize the benefits of a positive credit report until she applied for her current loan. "people don't usually know they can get lower interest rates," she said.
"I think this is a very positive measure to ensure the accountability of banks and give them more options and lower interest rates to reward those with good credit," he said.
Mr. Fogg said the CCR could significantly increase competition in the market, meaning consumers could reach a more concessionary deal on loans. RateSetter has been "eagerly waiting for banks to share their data so that we can reward borrowers who have proven themselves able to manage their finances," he said.
Not everyone is pleased, however, with consumer activists warning that the risk of Australian data falling into the wrong hands will rise.
The Consumer Action Law Center said there had been an embarrassing incident when the federal bank lost the personal financial records of 20 million customers stored on tape drives.
Steven Gerrard, CEO of the Consumer Action Association. Brody (Gerard Brody) said last month: "the credit report is already a bunch of bad data, chaotic processes and poor regulation."
"We are about to see a massive expansion in data collection and sharing, which will have a significant impact on people's lives."
