Are you ready for CCR?

This month sees the introduction of the Comprehensive Credit Reporting system (CCR) – a new, process for keeping track of credit worthiness. Lenders will be able to review more information about the credit history of borrowers before they make lending decisions. What will the new credit scores mean for you?

Before…	From March 12…
The Privacy Act meant a lot of information was kept secret	More information will be available
Only ‘major negative credit events’ (including defaults and bankruptcies) could be disclosed	Lenders can see a range of information, including credit limits and repayment history.

So what does this mean for you?

If got a good credit history…
It’s great! Potential lenders will have more evidence of your stable banking and steady repayments.

If your credit history’s not so great…
It’s a great incentive to change your ways! An bill of over $150 overdue for more than 60 days will show up as a default on your credit report. Obviously, the fewer of these on your credit file, the better!

It is possible to improve a negative credit rating – by paying bills on time and improving your credit rating you can show banks that you have the ability to recover and service your debts. For example, you should set up systems so you’re paying your bills on time, every time:

• Arrange to pay bills on payday
• Make the most of direct debits
• Negotiate with creditors before you default
• Only borrow money when you really need it.

It’s useful to remember that these changes are all about making sure people don’t over-extend themselves when it comes to borrowing.

We’re happy to talk with any clients that have queries or concerns about the new system.