Comprehensive Credit Reporting Explained

Read on to learn more about Comprehensive Credit Reporting, what it means, and how it could help you improve your credit score and unlock new financial opportunities down the line.

On this page:

• How does credit reporting work in Australia?
• What is Comprehensive Credit Reporting?
• Positive credit reporting vs negative credit reporting
• How can I check if my lender is a CCR participant?
• Pros and cons of CCR
• Check and improve your credit score with the Better Credit app

How does credit reporting work in Australia?

Credit reporting, not to be confused with a credit report, is the sharing of customer credit information between providers (such as banks and lenders) and credit reporting bodies like Equifax, Experian and illion. 

These independent credit reporting bodies securely collect and report your personal credit information to credit providers when you make an application for a product, helping them assess your suitability.

Credit reporting is primarily used to lend products like credit cards, personal loans, home loans, and car loans. Still, it can also be used to a lesser extent for phone, internet, and utility providers.

What is Comprehensive Credit Reporting?

Comprehensive Credit Reporting (CCR for short) refers to sharing more comprehensive customer information between credit providers and credit reporting bodies. Also sometimes known as Positive Credit Reporting, it means someone's positive credit behaviour can now be seen on their credit report, such as:

• Repayment history of accounts (credit cards, loans, bills, etc.)
• Types of credit accounts opened in the last two years (including Buy Now, Pay Later)
• The dates you applied for, opened, and closed credit accounts.
• The current limits on your credit products.

But isn’t that how it was always done? Well, not quite…

Positive credit reporting vs negative credit reporting

Before the introduction of Positive Credit Reporting, credit reports only flagged negative credit behaviours, such as missed repayments, hard credit inquiries, payment defaults, infringements and more. This was sometimes called ‘Negative’ Credit Reporting and didn’t provide nearly as accurate a picture as Comprehensive Reporting.

While the previous system only showed the bad (or neutral) stuff, making it harder to improve your credit score and maintain a steady credit history, CCR means your strong credit behaviours, like timely repayments and minimal applications, can be seen by banks and lenders, potentially strengthening your position.

Does every lender participate in Comprehensive Credit Reporting?

Not every lender or bank shares positive credit data under CCR, although many now do. It’s only compulsory for the four big banks and larger financial institutions, like Macquarie, HSBC, ING, etc. 

Jacaranda Finance reports data under the Comprehensive Credit Reporting regime. With Comprehensive Credit Reporting, we will now provide a more detailed and comprehensive view of your credit history to credit bureaus. 

This means that your credit behaviour, such as making timely repayments and managing your loans responsibly, will be reported, potentially strengthening your credit profile.

How can I check if my lender is a CCR participant?

Your bank or lender should declare on its website if it shares credit data under the CCR scheme, but you can also check third-party websites like CreditSmart. As of June 2013, CreditSmart states that more than 80 credit providers are supplying CCR data: you can see the list for yourself.

When did CCR first start in Australia?

CCR first began in March 2014 in Australia when the Privacy Act was amended to allow the sharing of positive credit information. Back then, it was primarily optional, and it wasn’t until November 2017 that it was made mandatory for the big four banks to participate.

Some other key dates in the CCR timeline are:

• July 2018: Big Four banks made to share 50% of credit data within 90 days
• July 2019: Big Four made to share the remaining 50% of their credit data within 90 days.
• April 2020: Large ADIs (Authorised Deposit-taking Institutions) are made to share 50% of their data within 90 days. Large financial institutions have over $100 billion in assets over three years.
• April 2021: Large ADIs are made to share the remaining 50% of their data within 90 days.
• August 2023: Jacaranda Finance joins CCR.

So why should you care about Comprehensive Credit Reporting?

Under the negative reporting regime, improving a credit score after a setback could be extremely difficult. Not being able to access the finance you need for one of life's significant expenses due to a low credit score can make things much harder than they need to be.

CCR can generally make it much easier to rebuild your credit history. By applying for and repaying a loan or credit card on time, your credit score could increase faster than it did before.

You may also have improved access to more competitive loan products, better loan terms and increased transparency in your credit information.

What the stats say

According to 2019 research from Credit Simple, 52% of Big Four bank customers saw their credit scores increase just months after their bank started contributing positive credit information. Another 26% saw no change, while the average increase was 27 points (out of 1,000).

Across the ditch in New Zealand, CCR was officially introduced in April 2012. Since then, the average Kiwi has seen their credit score increase by around 100 points!

Pros and cons of CCR

While Comprehensive Credit Reporting might sound like a pretty sweet deal, it’s not perfect. Below is a breakdown of the pros and cons of CCR in Australia.

Pros

• More complete credit information: Credit providers can access a more complete picture of your credit history and make more informed lending decisions.
• Ability to negotiate better terms: If you have a solid recent credit history, CCR could let you negotiate better terms on loans and credit products, such as lower interest rates or higher credit limits
• Better products: With CCR, your improved credit standing could make you eligible for better and more competitive products in the first place.
• Faster credit score improvements: People who've positively changed their credit behaviour (such as paying off a loan) may see their credit score improve faster under CCR than before.
• Recover from setbacks faster: Things like defaults or bankruptcies can stay on your credit report for years. So, if you fell on hard times just once but have demonstrated good credit behaviours since then, CCR can highlight this to credit providers.

Cons

• More complete credit information: This can also be a disadvantage. As CCR gives a more detailed picture of someone's credit history, it's more likely to show negative behaviours that might have been missed as well. While Credit Simple found that 52% saw an average credit score increase of 27 points, 30% saw their scores decrease by 53 points!
• More data, more errors? Mistakes can happen, and inaccuracies could appear on your credit report more often if more information is being captured.
• Data privacy concerns: More personal financial data being shared with credit reporting bureaus and providers can raise concerns about privacy and data security.
• More marketing from lenders: The insights gleaned from your credit reports by lenders you've previously applied with could result in more aggressive marketing and promotions, which isn’t a huge issue but can be very irritating!

Check and improve your credit score with the Better Credit app

Jacaranda Finance has been reporting data under Comprehensive Credit Reporting for a while now. By applying for a loan with Jacaranda Finance and making your repayments on time, every time, you could see a steady improvement in your credit score. 

To make sure CCR is working for you, you can download our Better Credit app (or log in to your online customer portal) to check your credit score for free! With monthly updates via Equifax, it’s easy to monitor your credit score’s progress.

Download the Better Credit app below to check and begin improving your credit score today!