Today marks Australia’s move to comprehensive credit reporting

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On 12 March 2014, reforms to Australia’s Privacy Act will see significant changes to the credit reporting system including the introduction of the Credit Reporting Privacy Code (CR Code) drafted by the Australian Retail Credit Association (ARCA).

Credit reports previously only featured negative information about an individual’s credit history, such as defaults and enquiries, but from today some credit providers who choose to participate in comprehensive credit reporting (CCR) will also be able to share and access additional information such as repayment history information. These reforms will provide a clearer picture of a consumer’s ability to repay debts, enable better matching of consumer credit needs and give fairer access to credit with increased consumer protection.

Independent research commissioned by ARCA found the vast majority of consumers recognise the importance of having a good credit report, as either important (67%) or very important (21%). When consumers were informed about the changes, over half (53%) felt the new system will make things better for them, while 42 per cent believed they would be no better or worse off. One in four (25%) consumers feel stressed when it comes to managing credit and their own personal financial situation.

ARCA CEO Damian Paull said the positive response from consumers to the reforms to credit reporting  were encouraging.

“Consumers see the new credit reporting system as more consumer centric – and a second chance for the “not so good payers. Dealing with finances is not always easy so it’s promising Australians are becoming more aware of credit reporting and taking steps to manage their credit footprint and financial future,” said Mr Paull.“

Last month, with the assistance of Australia’s largest financial institutions and credit reporting bodies, ARCA launched their consumer education website www.CreditSmart.org.au to help improve consumer understanding of the credit reporting changes.

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