With CCR (comprehensive credit reporting) already in place, it is important to know what can impact your credit score moving forward.
Below we take you through some quick info on the importance of being aware of your score and how positive data can impact your next credit application.
Why every Australian should care
More than ever before, your financial history counts when you apply for credit. Increasingly, lenders take into account your entire available repayment history when deciding whether or not to approve your credit application.
Although positive data sharing is a relatively recent development amongst the majority of credit providers, momentum is growing. All Australians need to be aware that their credit repayments today can impact their credit scores and applications for credit now and in the future.
Are Australians aware of the change?
To find out where Australians were at in their understanding of positive data sharing, Experian conducted large-scale research in both 2017 and 2018 to map local perceptions and see how they changed over the year.
Although positive data sharing has already begun, a whopping 60% of consumers surveyed were not aware that credit providers plan to share more of their personal financial data:
- 31% are supportive if it means responsible people are more likely to be approved for credit, or those who can’t afford to repay a loan are more likely to be declined
- 32% are also happy to share more data if it helps them negotiate a lower interest rate or create more competition and lower costs
- 23% stated they didn’t want their data shared with third parties without their consent
- 23% also said they are supportive only if their information is kept safe and secure
Credit applications with positive data
Below are six examples of possible credit provider assessments of negative and positive credit reporting data (this information can be used by lenders in combination with other considerations).
So, what should you do now?
- With credit providers looking back at up to 24 months of a customer’s credit repayment history, borrowers need to look after their future credit score by diligently making mortgage, loan and credit card repayments on time.
- Your credit score may change over time, so check your credit reportinformation regularly. As new positive data elements are factored into credit reports, it’s a good idea to regularly check the information on your credit file to make sure you know if, and when your credit score changes and can ensure the information is correct.
- Always try to pay bills on time to help protect your credit score. Paying bills significantly late to the point where debt collection agencies are engaged can negatively impact your credit rating.
Source and inspiration: Experian, Know the score: how positive data could impact your next credit application.