There are big changes to how your credit score is calculated. Here’s how they impact you
Big changes to how your credit rating is calculated are taking effect, with lenders able to access more information about your credit history than ever before.
It has its fans and critics and has been five years in the making.
Let’s break down what it means for you.
What is comprehensive credit reporting (CCR)?
It’s a beefed-up system of information about your credit history that lenders can access via credit rating agencies.
Previously, lenders were only able to find out negative information about your credit history, like payment defaults, bankruptcies and court orders and judgements.
In 2014, the government brought in changes so more “positive” information will be included.
This includes whether you have a mortgage, your mortgage repayment history going back two years, your credit card limit and repayment history, and repayment history on car loans and personal loans.
If it began in 2014 why is it in the news now?
Because finally, the big four banks have uploaded all their mortgage data to the system.
In the past month, about 4 million mortgage accounts were fed in, meaning now 80 per cent of all mortgages in Australia are known for CCR.
As for credit cards, 15 million — or 60 per cent of all cards — have been reported.
More information will continue to be fed into the system in the coming months.What does it mean for me?It could mean your credit rating will change — for better or for worse.
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