By law, any lender who is assessing you for finance has to make “reasonable enquiries” into your personal and financial backgrounds. For most lenders, this means delving into your credit history – a document that contains all your personal details (age, addresses, driver’s licence number etc.) and financial history.
Prior to 1 December 2013, most of that financial information in these credit reports concerned negative reporting - things like defaults and bankruptcies listed against you.
Thankfully, the picture your credit history paints of you is now more balanced. Since Comprehensive Credit Reporting (CCR) was introduced in late 2013, banks and lenders have been able to see more positive information - like whether you pay your bills on time and whether you make payments in full or in part.
So how does this affect my chances of getting a loan?
How does CCR affect me?
CCR means lenders can see all of your monthly repayment history on accounts such as mortgages, car loans, personal loans and credit cards. That puts them in a stronger position to make a judgement - for example, they may be better able to see a small default that has been paid as a blip on the radar if you generally pay your bills on time and in full.
What difference will this make to my loan applications?
In general, CCR has not made a major difference to how loan applications are assessed. That’s because it is not compulsory to report these additional details back to reporting agencies who hold your credit history.
Take up amongst larger financial institutions has also been slow - but that will change. Once one major bank begins reporting in this more comprehensive manner, it is likely that everyone else will follow.
It’s also worth bearing in mind that banks and lenders are able to backdate CCR to 1st December 2013. So even if they are not reporting your current good conduct to credit reporting agencies, it will still go on your history once they start.
For future loan or finance applications, CCR could be your application’s saving grace, or the final nail in its coffin (depending on your overall financial history).
In general, CCR has not made a major difference to how loan applications are assessed.
How can I see what shape my credit report is in?
By law, credit reporting agencies like Veda and Dunn & Bradstreet must provide you with a copy of your credit history upon written request. They must offer this service free of charge, although it can take some time and you may have to pay fees if you’re in a rush.
What if there’s something on there that looks worrying?
Call us and we’ll guide you through the process. If you have a credit default listed, read about how to get a credit default removed from your credit history.
We’ve dealt with many customers who’ve had credit discrepancies and still been able to find a loan that suits them. Even if we can’t help you find finance immediately, we’ll happily advise you on the next steps to give you the best chance possible in the future.
With over a decade of experience, Rapid Finance has built a reputation of matching our clients with the right lender. No matter what your situation is, we can help you find the loan that is suitable for you.
Call 1300 467 274 to discuss your situation today.