HAVING a squeaky-clean credit history is about to put consumers in the driver’s seat and deliver them better deals.
Positive credit reporting or comprehensive reporting — that tracks a borrower’s ability to repay bills and pay debts on time — is being collected.
It will enhance the cases of consumers making future applications for credit cards, loans, mortgages and other lines of credit.
Consumers will be monitored closely on their ability to repay their credit accounts.
New analysis by one of the nation’s largest credit reporting agencies, Experian, has found two in three people are not aware of the upside of credit providers collecting “positive data” and having access to more of their customers’ financial information than ever before.
Experian’s managing director in Australia/New Zealand Suzanne Steele said the changes could result in those with clean credit history getting better deals.
“Positive data will reward responsible Australian borrowers and lenders can think about your good behaviour and not just your bad in terms of managing your finances,’’ she said.
“It’s almost like a financial CV, it says how you behave as a borrower so we think positive data should mean it’s more competitive in the Australian marketplace because banks and lenders will see much more information about you as a consumer.
“Then they can make different decisions around the products they offer you.”
A credit score will soon include both positive and negative data information that is collected by lenders and shared with credit agencies.
Previously only negative information has been collected.
Using this positive information, lenders will be able to look back at the last two years of a person’s credit behaviour, including how many credit accounts are held, how well repayments are met and if any defaults were made.
Consumer finance expert Lisa Montgomery said people need to be “diligent with payments” to maximise the positive effects on future loan applications.
Consumer finance expert Lisa Montgomery urges consumers to closely examine their finances and ability to repay bills.
“Now every activity that you do in relation to a credit product that even extends to your utilities and your bills including your phone can impact your ability to get finance,’’ she said.
“It will now impact your ability to get a better deal as well (because) positive reporting will provide lenders with enough information to then be a little bit discerning about what they offer you.”
There are a range of different places you get your credit score from including credit reporting agencies Experian, Veda and Dun and Bradstreet.