Everyone has goals in life that requires money, and using credit is one way to help you achieve them. It can be used to help you purchase a car or home, renovate, go on a holiday, get married, and even have a child. Understanding how credit works and the information financial institutions use to evaluate your ability to borrow money is vital.
A key piece of data used by lenders is your credit report. From 29 March 2019, CUA will be using comprehensive credit reporting (CCR), an industry initiative that can benefit both borrowers and lenders. Under the new reporting system, your credit report will reflect a more balanced view of your payment history information. Both lenders and borrowers will be able to view a 24-month history on whether payments were made on time for a range of accounts including your credit card, home loan and any personal loans.
Credit is typically money you borrow from a credit provider (such as a bank or credit union) and then pay back over time. Loans, credit cards and overdraft facilities are examples of credit. Other types of credit can include phone and internet services, utilities and hired rental equipment.
Your credit report contains detailed information about your credit history. It will show whether you've made your payments on time for accounts like your credit card, home loan and personal loan over the last 24 months. As a more balanced view of your payment history, it will also include your previous applications for credit, current credit accounts, overdue payments and any bankruptcies. The information on your credit report is governed by Australian privacy laws.
When you apply for credit, your credit report and score may be used to help a provider evaluate your ability to pay back the credit. As a result, how you manage your finances can impact your ability to obtain future credit.
Your credit score is a number intended to indicate how likely you are to repay credit. It can be based on your credit history. You may have different credit scores based on the information that different organisations hold about you.
Borrowers will be more empowered under the comprehensive credit reporting system. CCR means you’ll be able to see the same information lenders see when they look at your credit history. By monitoring your credit information you can check how your credit health is tracking and see how you could improve it. Plus, you have more consumer rights relating to credit reporting and the details contained in your credit report.
If you manage your credit effectively, this may be reflected in your credit report. Most credit providers use credit reports as one part of their process to assess applications for credit. Poor financial decisions may impact your ability to obtain future credit. Conversely, some credit providers may offer a better interest rate as a reward for having a good credit history. Under changes to the Australian privacy laws in 2014, credit can now be better matched to suit your individual needs.
You’re entitled to a free copy of your credit report every 12 months from a Credit Rating Bureau (CRB), or within three months of a denied credit application. The CRB must provide the report within 10 days of your request.
Talk to us. Many people go through a hard time with their finances at one time or another, and our experienced team is here to help. We’ll discuss your options and help you find the best way to get back on track.
If you need help, you can also get independent advice from the National Debt Helpline. This is a free service with dedicated people in each state that will work with you to understand your circumstances and help with next steps. Contact the National Debt Helpline on 1800 007 007 from anywhere in Australia.
Your credit history can actually improve over time. This is because under the comprehensive credit reporting system information is retained on your credit report only for a defined period of time.
Even if you pay your bills on time, you should check your credit report at least once per year to make sure that you haven’t been a victim of identity theft and that there are no errors in the report.
Listed below are some resources that provide further information on credit, tips on managing it, and details of Australian privacy laws.
Credit Smart – an information website developed by credit experts in conjunction with consumer advocates and government bodies to help consumers understand credit reporting. The site has some frequently asked questions, as
well as a number of handy fact sheets available.
Money Smart – a financial literacy website developed by the Australian Securities & Investments Commission (ASIC) to help people make
the most of their money.
Office of the Australian Information Commissioner – an independent Federal Government agency responsible for freedom of information, privacy and information policy.
In March 2014, the Australian Government amended Australian privacy laws to allow more information to be included in credit reports. Credit reports can now contain more information gathered from credit providers and publicly available databases, building a more complete picture of an individual’s credit situation, including how they are managing their range of credit accounts.
Consumer credit reports also now contain more information that individuals can access in their own reports, and the Privacy Act specifies the organisations permitted to access reports. The Privacy Act also sets out what information in credit reports can be used for, and who it can be shared with.
In addition to comprehensive credit information, the Australian Government introduced new obligations for handling complaints, correcting information on consumer credit reports, and managing identity theft and fraud.
CUA takes your privacy and security seriously. You can find updated information on how we manage your personal information, including credit information and credit eligibility information, in the CUA Group APP Privacy & Credit Information Policy.
This policy contains information about credit reporting and our privacy practices, including the name and contact details of credit reporting bodies to which we disclose your personal information, the types of personal information we disclose and your rights in relation to that personal information.
CUA obtains and shares credit reporting information about CUA members with one or more loans, credit cards and/or overdraft facilities, with credit reporting bodies in Australia.
This information will be included in credit reports compiled by the credit reporting bodies CUA deal with. Missed payments and late payments may start to show on your credit record and may affect your credit score and future credit applications, so it is important that you stay on top of your payments.
Both credit providers and credit reporting bodies must protect the privacy and security of your personal and credit information.
Your credit report can only be obtained by a credit provider if you have applied for credit with them – such as a financial institution, telecommunications or utilities company, or an organisation that offers mortgage insurance for a home loan.
Your credit report cannot be accessed by organisations that provide other types of insurance, real estate agents, your employer or any other individual.
Please note:
You should be aware that when requesting your credit report from a credit reporting body (CRB) that they may ask you to provide your consent to receiving marketing material and/or offers from the CRB, their related entities and other partners.
We suggest you read all the terms and conditions carefully, particularly where it says things like, ‘I consent to…’ or ‘By signing up, I accept…’
If you do not wish to disclose your personal information for marketing purposes, you may need to take specific action, such as contacting the entity to cancel your consent or update your marketing preferences when you sign up.
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