Why your credit score might have changed recently

There’s a good chance that many Australians would have seen their credit scores go up recently thanks to a national change to credit reporting that happened on July 1.

This change, known as Comprehensive Credit Reporting (CCR), means that lenders are now required to share a customer’s full credit history with each other, both positive and negative, so they can see a clearer picture of your financial past.

Previously, lenders only needed to share negative information such as defaults and overdue payments etc., but now positive information, such as when a borrower has made payments on time, will need to be shared too.

Only the four major banks (NAB, CommBank, Westpac and ANZ) are required to share this data, however we are starting to see other lenders adopt the new policy to help them remain competitive.

What does this mean for borrowers?

CCR is good news for most borrowers, or anyone hoping to negotiate a better deal from banks, insurance companies, utility or telephone providers for that matter, because most people should have a higher credit score from the change.

Obviously the higher your credit score is the better when negotiating so it’s always worth the effort to improve your credit score whenever you can. You can do this by always making your repayments on time and paying down debts and loans as much as possible.

Those with a low credit score may find it harder to obtain credit and may also be charged higher interest due to the higher risk that a lender needs to take on.

To find out your credit rating and ensure that the information on your credit record is correct it may be worth a visit to www.mycreditfile.com.au. Any errors on your credit record can also be reported through this website.

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