MORE of your personal credit history is now being watched by banks and other lenders.
National Australia Bank has started sharing people’s mortgage payment information with credit agencies, and the other three major banks will join it within six months.
It’s all part of Australia’s shift to comprehensive credit reporting, which puts positive — as well as negative — credit behaviours onto credit reports used by lenders when assessing loan applications.
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The banks started sharing credit card and personal loan data last year and have until September this year to add mortgages. Other lenders that are also sharing data include Citibank, HSBC, mutual banks and fintechs such as RateSetter.com.au.
Australian Retail Credit Association CEO and chairman Mike Laing said it was a positive move for borrowers who had good repayment histories.
“Lenders have always received credit reports but in the past the only information on them was negative information if you had a default, so for most people there was nothing there,” he said.
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“It’s far more important now that you do check it because there’s more information. You have a right to check your credit report for free once a year.”
However, almost two-thirds of Australians have never checked their credit report, which is compiled by agencies such as Experian, Equifax and Illion and accessed through websites including creditsavvy.com.au, getcreditscore.com.au and creditsimple.com.au.
Mr Laing said up to two years of monthly home loan repayments would soon be on most people’s credit reports.
“Another point to note is that your mortgage loan limit will be reported and visible on your credit report. This along with the limits on other accounts you may have — such as credit cards — and your repayment history will give lenders a good view of the overall amount of debt you have been able to handle,” he said.
People should visit creditsmart.org.au for more information, Mr Laing said.
Financia managing director Angelo Benedetti said it was good that more credit data — both positive and negative — was now appearing on people’s credit reports.
“It’s always important to maintain a perfect repayment history because otherwise it will go against you,” he said.
Applying for new loans “blind” without knowing what was on your credit report could cause problems, Mr Benedetti said.
“You might have something against you because you changed addresses.”
Defaults on phone bills and other small consumer debts have often caused problems for people’s loan applications.
“You get one free credit report a year — it’s worth checking,” Mr Benedetti said. “Ensure that your finances are in order and your credit report is good.”
WHAT’S ON YOUR CREDIT REPORT
• Loan repayment histories going back two years
• Types of loans taken out
• Loan applications
• Defaults when payments are at least 60 days overdue
• Court judgments
• Bankruptcies stay on reports for at least five years