Credit reporting laws a win for small businesses: Banking Association

credit reporting

The Australian Banking Association (ABA) has welcomed the passage of the new Comprehensive Credit Reporting (CCR) laws in Parliament, saying that the laws will help lead to better deals for customers with a good credit history and offer better support to those experiencing financial difficulty.

“Households and small businesses will get better access to finance as a result of these welcome changes,” Australian Banking Association CEO, Anna Bligh, said. “More information is better for customers as it gives lenders a more comprehensive picture of a customer’s financial situation.”

While previously a credit report only required credit inquiries, defaults, and serious infringements, under the new Comprehensive Credit Reporting (CCR) guidelines, banks will be required to provide additional information to credit agencies about the credit history of their customers. This, in turn, will provide lenders with more detail and insight on the customers, including positive financial behaviour.

The additional information shared under the mandatory regime includes account open and close dates, the type of credit provided, credit limits, financial hardship information and up to 24 months of repayment history information. The CCR will provide credit agencies with greater insight as to whether customer is working with their bank to get back on their feet.

“Having more information on their credit history means customers will have greater choice and more opportunity,” Bligh said. “This is also good news for customers experiencing financial difficulty. Now, more context will help ensure customers’ credit histories are more accurate and reliable.”