On the 1st of July, Australia’s big four banks started implementing a system known as “comprehensive credit reporting”.
But what exactly does that mean?
Comprehensive credit reporting means that when credit providers supply credit bureaus with information about how their customers are managing loans, they supply both “positive” and “negative” information.
In the past, banks supplied each other with only "negative" information -- such as when customers missed repayments.
Now, banks are also supplying "positive" ones -- such as when loans are repaid on time.
Comprehensive credit reporting is thought to be more reflective of how individuals manage loans and gives people the chance to balance out a "negative" event with a "positive" one.
Eighty per cent of mortgages -- that's four million -- are already being recorded in credit scores, along with 60 per cent of credit cards -- that's 15 million.
If someone has six credit cards which each have a credit limit of six thousand dollars, lenders will see this on your credit report and calculate your risk or liability factor as 36 thousand dollars -- even if only two thousand dollars of that money is still owed.
Experts advise anyone who is interested in checking their credit card history to go the government ASIC or Australian Securities and Investment Commission website.
