Could a new tool for banks improve your chances of getting credit?

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?

Bank customers using ATM machines Source: AAP

In the wake of the Banking Royal Commission, lenders have tightened restrictions, making mortgages and loans harder to get.

But now the big four banks have a new tool to decide how much more debt to give us - comprehensive credit reporting.

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.

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.