Credit is an essential part of life, especially for people in the market for a new home. A new way to measure and evaluate credit information is available in Australia, with potential lenders now able to access positive credit reporting for a more comprehensive overview. Borrowers will benefit greatly from these changes, with easier access to credit, better credit terms, and greater control over your credit information just some of the possible advantages.

Credit reporting used to be almost entirely negative, with lenders looking mostly at credit defaults and past credit applications when evaluating new loans. All of this has changed, however, with lenders now able to access positive repayment history. You can finally be rewarded for doing the right thing, with lenders able to generate a more balanced overview of your credit history.

The Australian Privacy Principles came into effect in March 2014, with banks around the country now starting to integrate this new information into everyday loan applications. You are likely to see some significant changes to the credit application process, with lenders now able to share customer's credit limits and positive repayment history for home loans, credit cards, personal loans, and facility overdrafts with credit reporting bodies such as Dun & Bradstreet, Veda, and Experian.

Comprehensive Credit Reporting (CCR) redresses the balance in the lender-borrower relationship, with these changes empowering consumers to seek better deals when negotiating with lenders. Not only will the barrier of entry be lower when applying for new credit, positive reporting also enables people to expand their loan choices and be rewarded for positive credit behaviour. According to credit reporting agency Veda’s marketing manager Belinda Diprose, “It’s really about making sure people aren’t overextending themselves and lenders have best possible picture when it comes to making a credit decisions.”

Like most things in life, these changes are a double edged sword, with lenders able to access more detailed information about types of credit, individual credit limits, and how often people miss repayments. For example, late repayments of more than five days will be noticed under the new system, but will not be marked as defaults unless they are more than 60 days overdue for amounts of $150 or more. A positive credit reporting scheme can still detract from credit worthiness in some cases, with non-default data still having an adverse effect if it concerns missed payments or very high debt levels.

While comprehensive credit reporting may not always have a positive effect, it will help people with a good credit history to access additional products and better credit terms. New changes also make the credit reporting system more transparent, with consumers given greater control over their credit information and credit providers and reporting bodies forced to fix incorrect information. It's never too late to get your credit history working for you, so why not contact your local mortgage broker today.